Read the latest edition of AIR and MEIR as an Interactive e-book


May 2020

Increasingly challenging conditions for insurers - IAIS

Source: Asia Insurance Review | Mar 2017

The insurance sector remained well-functioning and stable in 2016, as evidenced by high capital levels, positive profitability, and a persistent inflow of additional capital, said the 2016 edition of the Global Insurance Market Report (GIMAR) authored by the International Association of Insurance Supervisors (IAIS). 
   However, weak global demand, low inflation rates, very low and partially negative interest rates, and bursts of financial market volatility may put pressure on insurers’ current ability to weather these challenges, the report added. 
   Key findings in the report include: 
  • Non-life (re)insurance continues to be subject to soft market conditions. Competition is especially strong in the reinsurance market. 
  • The prolonged low interest rate environment remains a source of vulnerability for life insurers, especially in Europe. 
  • Life insurers are under pressure to improve their expense management and to reduce costs. 
   To safeguard the stability of the financial system and economies in the future, the report concludes that, from a macro-prudential supervisory perspective, it is essential to ensure that insurers are responding adequately to the accumulation of risks and structural changes that are a source of potential vulnerability. 
Strengthen ability to respond to increased risks
Another important challenge is to strengthen the ability of insurers to respond to risks in areas where they are increasing their risk-taking. Given the importance of large insurance companies to the financial system and the economies in which they operate, it is important they maintain a solid financial base and strengthen business management frameworks to manage the accumulation of risks, as well as being prepared to respond in an orderly manner in times of stress, said the report. 
   The 2016 GIMAR contains the IAIS Global Reinsurance Market Survey results. It also examines several special topics including the relationship between climate change, insurance and regulation; the first experience with Solvency II; and the results of EIOPA’s 2016 insurance stress test. 
   The Global Insurance Market Report, first published by the IAIS in October 2012, can be found at the IAIS website (
| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.


Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.