The European Insurance and Occupational Pensions Authority published its April 2025 Insurance Risk Dashboard, based on Q4 2024 Solvency II data and Q1 2025 market data, and assessed risks in the European insurance sector as stable and overall at medium levels, while highlighting pockets of vulnerability linked to ongoing market volatility driven by high geopolitical uncertainty. Global macroeconomic risks remained at a medium level, with slightly weaker GDP growth and higher inflation forecasts, and geopolitical uncertainty and fragmentation flagged as potential headwinds. Credit risks were stable through March 2025, with high portfolio quality despite a small rise in lower-rated assets, though early April saw a modest widening of spreads as risk premiums were reassessed. Market risks stayed elevated with a worsening outlook as bond and equity volatility remained high, bond exposures rose slightly, real estate values fell with insurers’ exposures described as limited, and US tariff announcements in April triggered sharp market reactions, with further asset price corrections viewed as possible under high policy uncertainty. Liquidity risk stayed at medium, supported by stable cash holdings, positive cash flows and slightly higher liquid asset ratios, even as lapse rates remained elevated at end-Q4 2024 and liquidity management around derivatives was highlighted as important. Solvency and profitability risks held steady with robust solvency ratios and mixed profitability signals, while financial interlinkages, insurance risks and market sentiment were also assessed as stable at medium levels; ESG and cyber and digital risks were steady at medium but with an intensifying or rising outlook. The dashboard draws on prudential and financial stability reporting from 93 insurance groups and 2,153 solo undertakings, complemented with market data with a cut-off at end-March 2025.

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