The European Insurance and Occupational Pensions Authority (EIOPA) has warned that market volatility and growing cyber threats remain significant concerns for Europe’s insurance sector, according to its October 2026 Insurance Risk Dashboard.
The latest assessment highlights an increasingly uncertain risk environment, shaped by persistent geopolitical instability, financial market fluctuations and accelerating digitalisation.
EIOPA reported that macroeconomic risks remain at a medium level, although the outlook has deteriorated. Despite continued resilience in the wider economy, uncertainty surrounding geopolitical developments and rising interest rates could place additional pressure on sovereign debt sustainability.
Credit risks remain broadly stable, supported by insurers' high-quality investment portfolios and relatively unchanged underlying fundamentals. However, the regulator highlighted the need to monitor increasing debt financing costs and potential deterioration in private credit quality.
Market risks remain elevated following increased bond market volatility towards the end of September. EIOPA warned that the potential for a broader market correction, combined with renewed geopolitical tensions, could trigger a repricing of risk premiums and create further challenges for insurers' investment portfolios.
Despite these pressures, solvency and profitability risks remain at a medium level. Capital positions across the sector are broadly unchanged, while profitability indicators present a mixed picture.
There are also some more positive developments. Insurance risks have declined to a low level, reflecting strong premium growth across both life and non-life insurance businesses, alongside improvements in the upper end of the loss ratio distribution.
However, digitalisation and cyber risks remain elevated, with the outlook worsening. EIOPA identified concerns surrounding advanced artificial intelligence models, the potential digital spillovers of geopolitical conflicts and insurers' exposure through cyber underwriting.
Environmental, social and governance (ESG) risks remain largely stable, although the regulator expects this category's outlook to deteriorate over the next 12 months. Green bond holdings have increased modestly.
The dashboard draws on Solvency II reporting data covering 95 insurance groups and 2,092 individual insurance undertakings. It also incorporates market information up to the end of September 2026.
The findings underline the importance of continued risk monitoring and effective risk management as insurers navigate an increasingly complex operating environment, particularly in relation to investment exposure, cyber resilience and emerging digital threats.
