The International Association of Insurance Supervisors (IAIS) has published its mid-year update, the Global Insurance Market Report 2025, based on preliminary findings from its 2025 global monitoring exercise. The regulators from more than 200 jurisdictions say geoeconomic fragmentation, private credit investment by insurers and the increasing adoption of artificial intelligence (AI) are top supervisory priorities.
They say in aggregate, interim insurer results show stable solvency and profitability. Globally, they say the insurance sector is supported by strong operational performance, effective liability management and robust capital buffers. “Liquidity positions have also improved for many insurers, although some challenges persist due to increased allocations to illiquid assets, market volatility and dividend payments,” they write.
Geoeconomic challenges include credit, foreign exchange, liquidity, interest rate and underwriting risks. “Insurers are responding with robust risk management strategies, such as asset reallocation, scenario testing and crisis response planning,” the report states.
Private credit investment by insurers, meanwhile, is currently under scrutiny as the IAIS conducts an analysis of insurers’ private credit investments “to better understand potential vulnerabilities and refine supervisory frameworks.” Private credit risks noted include concentration and counterparty risks, liquidity risk, valuation and market risks, governance and systemic risk amplification. “Insurers participation in private credit markets could amplify systemic risks if a widespread downturn in private credit leads to forced asset sales or defaults,” they warn.
Finally, they say AI introduces risks that require governance and risk management. “The IAIS is examining AI adoption in the insurance sector with a focus on its implications for insurers’ operations, balance sheets and risk management frameworks.”
They add that climate risk will be discussed in a dedicated chapter in the association’s year-end report.
“Strong operational performance and organic capital generation played a pivotal role in mitigating the impact of volatile interest rates, adverse market movements and geopolitical tensions in recent years. Insurers also benefited from robust capital reserves, effective risk diversification across asset classes and geographies and disciplined ALM (asset and liability management),” the report states. “Some insurers faced pressures from market volatility, widening spreads and reduced cash reserves linked to dividend payments and share buybacks.”
