Continued resilience remains in the European insurance market amid geopolitical uncertainty and evolving structural risks, EIOPA’s latest Financial Stability Report has stated.
The report said strong capitalisation and liquidity positions helped the European (re)insurance and occupational pension sectors absorb market turbulence associated with geopolitical developments, the repricing of financial risks and shifts in global trade arrangements.
At the same time, insurers and pension funds continue to face vulnerabilities arising from financial markets, operational risks, claims inflation and broader structural developments.
“The current macro-financial environment is shaped by persistent geopolitical tensions, changes in international trade arrangements and rising defence spending needs,” EIOPA said.
“Financial markets remain sensitive to geopolitical events, resulting in heightened volatility across equity, fixed-income and foreign exchange markets. While labour markets continue to support economic activity through low unemployment and rising real wages, uncertainty surrounding inflation dynamics, energy prices and future policy decisions remains elevated.”
