European Insurance and Occupational Pensions Authority finds European insurance risks stable at a medium level in January 2026 Insurance Risk Dashboard

The European Insurance and Occupational Pensions Authority published its January 2026 Insurance Risk Dashboard, concluding that risks in the European insurance sector remain stable at a medium level, while an uncertain geopolitical environment continues to weigh on the macroeconomic and market risk outlook. Macroeconomic risk is assessed as stable at a medium level, supported by continued GDP growth and easing inflation, but persistent and widening geopolitical tensions, including involving Venezuela and Iran and frictions around Greenland, are increasing uncertainty for trade, energy and security. Higher public spending needs, particularly for defence and infrastructure, may also constrain fiscal space over the medium term. Financial markets remain vulnerable to valuation pressures and a potential unwinding of an AI-related asset price bubble could amplify volatility, even if this does not immediately translate into higher default risk. Credit and liquidity conditions are broadly stable, although funding dynamics show early signs of pressure amid increased issuance and sustained refinancing needs, while the insurance sector is supported by solid capital positions, stable profitability and strong premium growth, with continued vigilance flagged for geopolitical, trade disruption and cyber risks. The dashboard is based on Solvency II data covering the third quarter of 2025 and end-2024 from 97 insurance groups and 2,124 solo insurance undertakings, complemented by market data with a cut-off at end-December 2025.