IAIS Report: Global Insurance Sector Stable Amid Geoeconomic Risks

The International Association of Insurance Supervisors (IAIS) released its Global Insurance Market Report 2025 Mid-Year Update, based on preliminary data from its 2025 Global Monitoring Exercise (GME). According to IAIS, the report highlights stable solvency, liquidity, and profitability at the end of 2024, despite economic uncertainty. 

Per the report, insurers maintained solid balance sheets through strong operations, capital reserves, and disciplined asset-liability management. However, some firms felt pressure from market volatility, declining interest rates, and widening bond spreads. 

IAIS said aggregate systemic risk scores for global insurance groups remained steady compared to 2023. Increases in indicators like intrafinancial assets were offset by declines in areas such as minimum guarantees on variable products. 

The report noted that global economic growth is expected to slow in 2025 due to trade tensions, market volatility, and rising debt. According to IAIS, these conditions could weigh on asset values and complicate liability management, though diversification has helped support returns. 

IAIS identified geoeconomic fragmentation as a key risk, with rising geopolitical tensions creating challenges for insurers' asset and liability management. The report said insurers are responding with measures such as asset reallocation, scenario testing, and crisis planning. 

According to IAIS, insurers' growing investments in private credit offer diversification and cash flow benefits but also introduce risks such as credit, liquidity, and valuation concerns that require careful oversight. 

IAIS also highlighted insurers' increasing use of artificial intelligence (AI). Per the report, AI can improve efficiency and risk selection but raises governance, cyber, and operational risks that need strong management. 

Finally, the report noted that cyber and climate-related risks remain top priorities for supervisors. IAIS said these areas will receive further attention in the year-end report, due in December 2025.