The International Association of Insurance Supervisors (IAIS) has described the overall conditions for the global insurance sector in 2026 as stable, despite emerging risks linked to rising investments in private credit, geopolitical fragmentation, and the expanding use of artificial intelligence (AI). In its 2025 Global Insurance Market Report, the IAIS noted that global insurers remain financially robust, characterized by solid solvency, liquidity, and profitability, with systemic risk levels slightly lower than the previous year and still significantly below those seen in the banking sector.
In assessing the non-life and life insurance segments, the report highlighted a trend of improved combined ratios for non-life insurers across various regions. Life insurers, on the other hand, benefited from steady investment income and improved spreads, contributing to a positive outlook for the sector.
However, the IAIS raised concerns about the rapid growth of private credit within life insurers’ investment portfolios. Although overall exposure remains moderate, the association pointed out that this asset class poses risks regarding valuation, liquidity, borrower quality, and complex structures. As a result, regulatory bodies are intensifying monitoring efforts and systemic risk analysis.
Geoeconomic fragmentation, fueled by trade tensions, sanctions, and diverging monetary policies, is also impacting insurers’ asset values, currencies, and interest rates. This complexity complicates asset-liability management for international insurance groups. In response, regulators are enhancing stress testing protocols and improving cross-border coordination to mitigate these emerging challenges.
The report also addressed the increasing integration of AI in underwriting, pricing, and claims processes. While insurers cite efficiency gains from these technologies, regulators express concerns about model governance, data bias, cyber risks, and reliance on third-party providers, advocating for stronger oversight frameworks to ensure consumer protection and systemic stability.
On the topic of climate and catastrophe risks, the IAIS indicated that exposure levels have remained largely stable. Nonetheless, the organization continues to monitor changes in natural catastrophe coverage and reinsurance protection, emphasizing the importance of climate scenario analysis in risk management strategies.
Meanwhile, reinsurers have demonstrated strong capitalization in 2024, reporting stable underwriting results and growing premiums. Their conservative investment strategies have allowed them to remain resilient despite previous years of elevated natural catastrophe losses.
As the insurance landscape continues to evolve, the IAIS underscores the importance of adapting regulatory frameworks to address the complexities introduced by new investment strategies and technological advancements. Authorities are expected to prioritize oversight as insurers navigate these challenges, ultimately aiming to preserve the financial strength that defines the global insurance sector.
Looking ahead, the stability of the insurance market will depend on the effectiveness of these regulatory adaptations and the resilience of insurers in managing the multifaceted risks they face in a rapidly changing environment.
