Risks in European insurance sector stable at medium level

Written by Adam Cadle

30/10/2025

Risks in the European insurance sector are stable at a medium level, EIOPA’s October 2025 Insurance Risk Dashboard has revealed.

Macroeconomic risks have remained steady at a medium level as growth and inflation forecasts as well as monetary policy expectations show little movement. Fiscal and credit indicators have stayed weak, while labour markets have also softened slightly.

Credit risks are unchanged, with a solid portfolio quality and limited market impact from recent fiscal and political developments.

Market risks have remained elevated but stable. Volatility has eased somewhat, yet valuations remain stretched, warranting continued attention. Other annual indicators also contribute to maintaining the elevated overall risk profile.

Liquidity and funding conditions are steady, supported by stable cash positions and only minor changes in key indicators.

Profitability and solvency remained firm, with a slight improvement in insurers’ capital positions and strong levels of high-quality own funds.

Insurance risks showed a downward trend, as life premium growth moderates and underwriting results stabilise.

ESG risks remained at a medium level, although with an increasing trend. Insurers’ investments in green bonds as a share of the overall green bond universe decreased slightly, while undertakings’ median exposure to climate-relevant assets grew.

Cyber and digitalisation risks are gaining prominence, with an increased perceived likelihood of incidents and growing concerns around the vulnerabilities of IT systems.

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