The European Insurance and Occupational Pensions Authority published its January 2025 Insurance Risk Dashboard, assessing risks in the European insurance sector as stable and overall at medium levels, while flagging pockets of vulnerability linked to market volatility and shifts in real estate prices. Macroeconomic risks remained stable at a medium level as GDP growth and inflation forecasts held steady, while geopolitical tensions heightened concerns about declining international cooperation. Market risks stayed high, with bond volatility stabilising but still above historical standards. Liquidity and funding risks were rated medium but trending upward, reflecting a gradual increase in risk indicators over the last year and worsening funding conditions in Q4 2024. Solvency and profitability risks were unchanged at medium levels, with non-life solvency ratios for insurance groups and solo undertakings slightly improving in Q3 2024 and remaining largely unchanged for life undertakings; credit risk, insurance risks, market perceptions, and interlinkages and imbalances were also assessed at medium levels. The 12-month outlook pointed to increasing ESG-related risks, and supervisors noted a slight rise in digitalisation and cyber risk trends in Q4 2024 due to a higher perceived probability of risk materialisation. The dashboard is based on Solvency II data covering Q3 2024 and end-2023 from 93 insurance groups and 2,153 solo insurance undertakings, complemented with market data cut off at end-December 2024.

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