The International Monetary Fund and financial markets keep flagging fresh flashpoints, yet the world’s insurers spent the back half of 2025 holding largely steady, or so says the International Association of Insurance Supervisors. The IAIS published its mid-year Global Insurance Market Report this month, drawing on interim data from the 2026 Global Monitoring Exercise. The headline read is reassuring. The fine print is not quite as calm.
Stable Headline Numbers, a Less Reassuring Undercurrent
Interim data analysis from the 2026 Global Monitoring Exercise (GME) indicates stable solvency, liquidity and profitability positions in the global insurance sector at year-end 2025. The aggregate solvency ratio declined slightly but remained well above regulatory requirements. That resilience, the supervisors’ body said, was supported by continued strong operational performance, effective asset-liability management and robust capital buffers.
On the liquidity side, the insurance sector’s aggregate liquidity position, as measured by the insurance liquidity ratio, remained stable, indicating insurers retained ample capacity to meet policyholder obligations as they fall due. Still, some challenges persist due to increased allocations to illiquid assets, share buybacks, debt repayments, dividend payments and market volatility, the report noted, even as liquidity held broadly steady for most carriers.
Where the Systemic Risk Score Actually Moved
Aggregate systemic risk scores of global insurance groups at year-end 2025 increased slightly compared with year-end 2024, breaking the sense of uniform calm. The rise was concentrated rather than broad-based: the largest increases recorded in asset liquidation to generate excess cash and interconnectedness between insurers, financial markets and the broader economy. The underlying data set confirms the pattern: the aggregate scores increased slightly in 2025, with the largest increases recorded in asset liquidation and interconnectedness.
The scores sit inside a wider supervisory tool. They form part of the IAIS Holistic Framework, which aims to assess and mitigate the potential build-up of systemic risk in the global insurance sector, and are built from five systemic risk categories: size, global activity, interconnectedness, asset liquidation and substitutability, which together consist of 13 indicators. The underlying dataset is wide-reaching, drawing on 56 of the largest international insurance groups from 18 jurisdictions plus sector-wide data covering more than 90% of global gross written premiums.
Macro Pressure Points: Growth, Inflation and Private Credit
Supervisors’ caution traces back to the macro backdrop. The IMF projected global economic growth to slow down to 3.0% in 2026 and 3.4% in 2027, largely reflecting the disruptions associated with geopolitical conflicts, a drag only partly offset by stronger technology-cycle demand tied to AI adoption. Inflation adds another layer: it stood at 4.1% in 2025, is projected to rise to 4.7% in 2026 before declining to 3.9% in 2027. Combined with elevated sovereign debt, the IAIS warned: Geopolitical tensions, inflationary pressures and elevated sovereign debt levels present complexity for insurers’ balance sheets and business models in 2026, requiring a heightened focus on effective risk management, diversification and the adaptability of business models.
Private credit is emerging as a specific watch item. The Financial Stability Board estimating total global private credit assets at approximately $2.0 trillion at the end of 2024, a figure cited directly in the GIMAR mid-year update itself. Insurers are heavily exposed as institutional investors in that market, and the report says they face growing risks from valuation uncertainty, concentration risks and potential losses under stressed conditions, highlighting the importance of asset diversification and sound asset-liability matching. That vulnerability echoes concerns raised elsewhere in European supervision, including EIOPA’s own assessment of Solvency II resilience under sustained market pressure.
Non-Life in the Crosshairs: Geopolitical Transmission and Cyber
Non-life carriers face a more direct transmission channel from geopolitics. Per the IMF, escalating geopolitical tensions and disruptions to energy supply chains have increased the risk of renewed energy price volatility, which could feed through to inflation and raise claims costs across non-life insurance lines such as motor, property and business interruption. Transport-linked lines are already feeling it: Rising freight costs, energy prices and jet fuel prices, which have nearly tripled in some cases, are exacerbating pressures on underwriting margins and increasing exposure to operational risks. The dynamic mirrors themes covered in the minimum expectations regulators have set for insurer readiness against geopolitical shocks, where supervisors pushed carriers to stress-test exactly this kind of contagion.
Cyber is treated separately, and more positively. the insurance industry has made good progress in reducing silent cyber exposure, with cyber risks increasingly being explicitly covered under standalone policies. Even so, supervisors are not stepping back: the GME’s priority list tracks The impact of advancements in artificial intelligence (AI) and technology on insurers’ cyber resilience, alongside The impact of macroeconomic risks on life insurers’ balance sheets and Transmission channels of geopolitical risks in non-life insurance — the three themes anchoring deeper analysis through year-end.
What to Watch Before the Year-End Report
The tone from the top mixed confidence with caution. “The mid-year GIMAR highlights the insurance sector’s strength and adaptability in the face of continuing global challenges,” said Toshiyuki Miyoshi, Chair of the IAIS Executive Committee. His counterpart at the secretariat framed the risk side more bluntly: “The 2026 mid-year GIMAR highlights the increasing interconnectedness of risks, from macroeconomic pressures to cyber threats,” said Gerry Cross, IAIS Secretary General.
Climate risk, monitored continuously rather than singled out as a fresh GME theme this round, remains a fixture of the annual cycle: This analysis was first highlighted in the 2021 GIMAR special topic edition and has since been included as a dedicated chapter in every subsequent annual GIMAR. The interim snapshot is exactly that, interim. The year-end 2026 GIMAR will be published in December. Until then, supervisors will be watching whether the small cracks in liquidity, private credit and non-life claims costs widen or hold, alongside parallel conglomerate-level work such as the final capital standards regulators have set for insurance conglomerates.
