The European Insurance and Occupational Pensions Authority published its October 2025 Insurance Risk Dashboard, assessing overall risks in the European insurance sector as stable at a medium level. Market risks remain elevated but stable, while insurance risks are trending down; ESG and cyber and digitalisation risks are showing an increasing risk profile. Macroeconomic risks stayed at a medium level amid limited movement in growth and inflation forecasts and monetary policy expectations, with fiscal and credit indicators remaining weak and labour markets softening slightly. Credit risk was unchanged, supported by solid portfolio quality and limited market impact from recent fiscal and political developments. Market volatility eased somewhat but valuations remained stretched, and liquidity and funding conditions were steady on the back of stable cash positions. Profitability and solvency remained firm, with a slight improvement in capital positions and strong levels of high-quality own funds. ESG risks stayed at medium but increased, as insurers’ green bond investments as a share of the overall green bond universe decreased slightly while median exposure to climate-relevant assets grew. Cyber and digitalisation risks gained prominence due to a higher perceived likelihood of incidents and growing concerns about IT system vulnerabilities. The dashboard is based on Solvency II data and summarises indicators from the second quarter of 2025 and end-2024, drawing on reporting from 97 insurance groups and 2,124 solo insurance undertakings, complemented with market data with a cut-off at end-September 2025.

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