Financial stability implications from natural catastrophe insurance protection gaps
Source: Asia Insurance Review | Dec 2025
A new report by the International Association of Insurance Supervisors (IAIS) examines the potential financial stability implications of natural catastrophe insurance protection gaps.
The 76-page special topic edition of Global Insurance Market Report (GIMAR) published by IAIS in November 2025 underscores the critical role of insurance in mitigating economic and societal impacts of Nat CAT events.
The new report draws on six detailed case studies, including historical events and forward-looking scenarios, to illustrate the diverse impacts of Nat CAT events on the real economy, financial sector and society.
The report reveals that significant portions of economic losses remain uninsured – particularly in emerging markets and developing economy (EMDE) jurisdictions – potentially exposing economies to greater risks and challenging financial systems.
It says the widening protection gaps could increase financial stability risks, for instance by shifting more risks to the banking sector. It also assesses the key drivers, trends and impacts of these gaps and emphasises the importance of coordinated global action.
The IAIS has made substantial progress in elevating this conversation on the global policy agenda, bringing together insurance supervisors, the insurance industry and policymakers to highlight the role of insurance in tackling Nat CAT protection gaps.