In remarks at the Asian Insurance Forum 2025, the China Banking and Insurance Regulatory Commission set out its view of key issues facing the global insurance sector and highlighted areas it expects insurers and supervisors to prioritise, spanning two-way interest-rate volatility, climate-related risks, artificial intelligence adoption, and rising interconnectedness with non-bank financial assets. The speech argued that insurers should treat frequent, large, two-way interest-rate swings as a normal operating condition, noting that the US Federal Reserve raised the federal funds rate from 0% to 0.25% to 5.25% to 5.5% through 11 hikes since 2022, with other major economies also seeing higher and more volatile rates. It also described climate change as requiring remeasurement of actuarial assumptions and repricing of cover and investment assets, potentially contributing to protection gaps and greater reliance on reinsurance. On investments, it pointed to the rapid growth of non-bank financial intermediation since 2008, including global private credit exceeding USD 2tn, and warned that complex, less transparent assets can raise credit risk and speed up risk transmission as linkages with banking and insurance increase. From a supervisory perspective, it highlighted the importance of strengthening solvency-related capital constraints and leverage constraints on large risk exposures, and argued that sustainability assessments of insurers’ business models should become a more prominent supervisory focus, including reviews of strategy, asset-liability maturity and cost-return matching, resource support, and adaptability. The Commission also said it would continue strengthening bilateral cooperation with Hong Kong’s insurance industry and participate in international exchange to share practices and improve insurance regulatory frameworks.

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