Interconnectedness and asset liquidation drove the biggest increases in sectorwide risk scores.
Global insurers remain financially stable, but rising geopolitical tensions, economic pressures and cyber risks are becoming key areas of concern for the sector, according to the International Association of Insurance Supervisors (IAIS).
Preliminary findings from the IAIS’ 2026 Global Monitoring Exercise show that insurers had stable solvency and profitability positions at the end of 2025, supported by operational performance, asset-liability management and strong capital buffers.
However, the IAIS said insurers face challenges from higher allocations to illiquid assets, share buybacks, debt repayments, dividend payments and market volatility. Aggregate systemic risk scores for global insurance groups also rose slightly at the end of 2025 from a year earlier, with the largest increases linked to asset liquidation to generate excess cash and greater interconnectedness between insurers, financial markets and the wider economy.
The IAIS has identified three areas for deeper analysis in its 2026 monitoring exercise: the impact of macroeconomic risks on life insurers’ balance sheets, how geopolitical risks are transmitted through non-life insurance, and the effect of artificial intelligence and other technology on insurers’ cyber resilience.
For life insurers, changes in interest rates, credit spreads and inflation can put pressure on solvency, liquidity and profitability because of their exposure to long-term liabilities.
Insurers are responding through measures including asset reallocation, scenario analysis and liquidity stress testing.
In non-life insurance, geopolitical conflicts can disrupt energy markets, increase claims costs and raise underwriting risks.
The IAIS said insurers are strengthening capital and liquidity buffers to manage these exposures. Cyber risk is also becoming more complex as insurers and other businesses adopt frontier AI models.
The IAIS is examining how advances in AI and technology could affect insurers’ operational resilience. The IAIS’ 2026 monitoring exercise covers 56 of the largest international insurance groups from 18 jurisdictions, together with aggregate market data representing more than 90% of global gross written premiums. The full-year Global Insurance Market Report is due in December.