EIOPA's insurance dashboard shows overall stable risk landscape but geopolitical uncertainties worsen the outlook for macro, market and digitalisation risks

The European Insurance and Occupational Pensions Authority (EIOPA) published today its April 2025 Insurance Risk Dashboard based on Q 4 2024 Solvency II data and Q 1 2025 market data. The main findings show that risks in the European insurance sector are stable and overall at medium levels, with pockets of vulnerabilities stemming from ongoing market volatility related to high geopolitical uncertainty. Global macroeconomic risks remain stable at a medium level, with a slight decrease in GDP growth and an increase in inflation forecasts. Looking ahead, geopolitical uncertainty and fragmentation may negatively impact the macroeconomic landscape. Credit risks remained stable through March 2025, with minimal movement in spreads and only slight shifts in investment allocations. Portfolio quality stayed high despite a small rise in lower-rated assets. Early April saw a modest widening  of spreads as financial market participants reassessed risk premiums. Market risks remain elevated amid high volatility in bonds and equities, with a worsening risk outlook. Insurers slightly increased their bond exposures, while equity holdings held steady. Real estate values fell, but insurers’ exposures stayed limited. In April, the announcement of US tariffs triggered sharp market reactions. While markets have stabilised somewhat, further asset price corrections are likely in view of high policy uncertainty. Liquidity risks stayed at a medium level. Cash holdings continued to be stable and cash...