The European Insurance and Occupational Pensions Authority published its June 2026 Financial Stability Report, concluding that the European insurance and occupational pensions sectors have remained resilient in a difficult macro-financial environment marked by moderate growth, geopolitical uncertainty and episodes of elevated market volatility. Strong capitalisation, solvency and liquidity positions helped insurers, reinsurers and pension funds absorb turbulence linked to geopolitical developments, the repricing of financial risks and changes in global trade arrangements. At the same time, the report highlights continuing vulnerabilities from financial market moves, operational risks, claims inflation and broader structural shifts. The report examines these pressures across both sectors and through thematic deep dives on geopolitical developments, private markets, artificial intelligence and financial interconnectedness. It finds that European insurers stayed well capitalised and liquid through 2025, supported by life and non-life premium growth, stronger technical cash flows and higher investment returns, while remaining exposed to risk premia repricing, interest rate and foreign exchange volatility, claims inflation and pressures on internationally exposed business lines. Reinsurers maintained robust profitability and improved solvency ratios despite slower premium growth in some segments, but face ongoing risks from natural catastrophes, geopolitical events and disruption to marine and aviation transport. In occupational pensions, total assets were broadly stable and average funding ratios improved during 2025, with the report also reviewing the Dutch pension system's transition to a defined contribution framework and its effects on investment strategy, hedging and markets. Across the sectors, supervisors identify geopolitical tensions as the main concern, alongside sovereign exposures, links to banks and other financial institutions, and valuation and concentration risks in less liquid and private market assets, even though aggregate exposure to private credit remains relatively limited.
European Insurance and Occupational Pensions Authority2026-06-24
European Insurance and Occupational Pensions Authority financial stability report finds insurers and pension funds resilient despite geopolitical and market risks
The European Insurance and Occupational Pensions Authority's June 2026 Financial Stability Report says European insurers and occupational pension funds remained resilient despite geopolitical uncertainty and market volatility. Strong solvency and liquidity supported the sectors, but the report flags continuing vulnerabilities from financial market repricing, operational risks, claims inflation, sovereign and financial sector linkages, and private market exposures. It also highlights risks tied to artificial intelligence, less liquid assets and the Dutch pension transition.