United Kingdom's Prudential Regulation Authority (PRA) sent a Dear CEO letter setting out its thematic priorities for supervising PRA-regulated insurers in 2026, to sit alongside firm-specific feedback delivered through Periodic Summary Meetings. The agenda continues to focus on firms’ resilience and risk management in an uncertain environment, including competitive pressures in the bulk purchase annuity (BPA) market, a softening underwriting cycle in general insurance, and the need to keep investing in operational resilience. For life insurers, supervision will concentrate on pricing discipline and risk management in the BPA market, including a review of how firms have responded to earlier PRA expectations on solvency-triggered termination rights. The PRA also confirmed it is developing policy proposals on funded reinsurance following firm roundtables and will assess evolving investment strategies, including potential liquidity risks from structured and synthetic investments, and the adequacy of credit assessment frameworks, particularly for private credit exposures. For general insurers, the PRA expects boards to maintain underwriting and reserving discipline as market conditions soften and plans increased engagement where internal model assumptions appear overly optimistic, with potential supervisory action under Solvency UK if solvency capital requirements are materially understated; work will also target exposure data quality and oversight of delegated authority underwriting. Cross-sector priorities include deeper operational resilience testing, stronger third-party engagement, continued focus on legacy technology and change management, cyber assessments for higher-impact firms, and governance and risk controls for the increasing use of artificial intelligence. Key next steps include a further update in the second quarter on funded reinsurance policy work, implementation of new liquidity reporting requirements on 30 September 2026, and completion of a Solvent Exit Analysis by 30 June 2026 for insurers in scope of the solvent exit policy. The PRA will run the Dynamic General Insurance Stress Test in May 2026, consult in summer 2026 on a new UK captive regime intended to launch in 2027, and begin transitioning remaining firms from annual to two-year Periodic Summary Meeting cycles during 2026.
Prudential Regulation Authority 2026-01-15
United Kingdom's Prudential Regulation Authority sets 2026 insurance supervision priorities and plans move to two-year Periodic Summary Meetings
The UK Prudential Regulation Authority has set 2026 supervisory priorities for insurers, focusing on resilience and risk management amid competitive pressures in the bulk purchase annuity market, a softening general insurance underwriting cycle, and the need to strengthen operational resilience. Life insurance supervision will centre on pricing discipline, funded reinsurance and liquidity and credit risks in evolving investment strategies, while general insurers face closer scrutiny of underwriting, reserving, internal model assumptions, exposure data and delegated authority oversight. Cross-sector work will intensify on operational resilience testing, third-party risk, legacy technology, cyber risk and AI governance.