The International Association of Insurance Supervisors (IAIS) released its annual Global Insurance Market Report (GIMAR) for 2025. The report provides insights from this year’s Global Monitoring Exercise (GME), the IAIS’ risk assessment framework designed to monitor global insurance sector trends and detect the potential build-up of systemic risk.
Solvency, profitability and liquidity
The sector’s solvency position remains strong globally, supported by solid capital buffers and disciplined risk management. Liquidity positions remain adequate, with supervisors closely monitoring exposures to less-liquid assets. Insurers reported strong profitability in 2024, supported by underwriting discipline and stable investment income. Non-life insurers saw improved combined ratios across several regions, while life insurers benefited from favorable market conditions and improved spreads. Despite ongoing macroeconomic and geopolitical uncertainties, the outlook for the insurance sector in 2026 remains stable.
Systemic risk
Data from large international insurance groups indicate a slight decline in systemic risk profile at the global aggregate level. On a cross-sectoral basis, systemic risk scores for the insurance sector remain significantly lower than those of the banking sector, indicating a comparatively lower systemic risk footprint.
In 2025, the IAIS completed its regular triennial review of the individual insurer monitoring (IIM) assessment methodology, further strengthening its framework for assessing systemic risk. Additionally, the Financial Stability Board (FSB) reaffirmed its decision to use the IAIS Holistic Framework for the assessment and mitigation of systemic risk in the insurance sector to inform its consideration of systemic risk in insurance.
Private credit: heightened supervisory focus
The GIMAR’s dedicated chapter on private credit highlights its growing significance in life insurers’ investment strategies. Although aggregate exposures remain moderate, the report notes the rapid growth of private credit allocations across several jurisdictions. This asset class offers advantages such as liability-matching benefits and illiquidity premiums; however, it also presents distinct risks, including valuation uncertainty, liquidity challenges, borrower credit quality concerns and structural complexity.
The GIMAR links these findings to the IAIS Issues Paper on structural shifts in the life insurance sector, published in November. The Issues Paper explores the increasing allocation to alternative assets, including private credit, and rising use of cross-border asset-intensive reinsurance. Both the GIMAR and the Issues Paper emphasize the need for strengthened monitoring, deeper systemic risk analysis and the development of future supervisory guidance to address these trends.
Geoeconomic fragmentation: impacting insurers’ management of assets and liabilities
The report highlights that trade tensions, sanctions, divergent monetary policies and market fragmentation are contributing to financial market volatility, affecting currencies and interest-rates, and leading to greater uncertainty in asset valuations and more complex asset-liability management for internationally active insurance groups. Supervisors globally are responding by strengthening scenario analysis, data collection and fostering cross-border supervisory coordination.
Adoption and governance of AI: opportunities and risks
The use of AI and generative AI is expanding in underwriting, pricing and claims management. While insurers report significant operational benefits, the GIMAR also highlights supervisory concerns regarding model governance and transparency, cyber and operational risks, potential for data bias and third-party concentration risks. The IAIS Application Paper on the supervision of AI, published in July, provides further guidance to supervisors and insurers on addressing these risks and ensuring responsible AI adoption.
Climate-related risks
Insurers’ investment exposures to climate-related risks have remained relatively stable over recent years. In terms of insurers’ underwriting portfolios, the GIMAR highlights evolving patterns in natural catastrophe (NatCat) risk coverage and reinsurance levels over time. In response, both insurers and supervisors are increasingly implementing climate scenario analysis, despite data and methodological challenges. The IAIS will continue to enhance its climate-risk assessment, as demonstrated by the publication of a GIMAR special topic edition on natural catastrophe protection gaps published in November.
Global reinsurance market
Reinsurers remained well-capitalized in 2024, with underwriting results stabilizing after elevated natural catastrophe losses in previous years. Premiums continued to grow, retention ratios rose modestly and investment portfolios remained conservatively managed.
Toshiyuki Miyoshi, chair of the IAIS Executive Committee, said in a statement: “The 2025 GIMAR highlights the resilience of the global insurance sector amidst significant structural shifts. As insurers navigate the rapid expansion of private credit, manage risks from geoeconomic fragmentation, and embrace the evolving role of AI, supervisors must ensure that governance, risk management, and monitoring frameworks are strengthened to address these changes.”