The International Association of Insurance Supervisors (IAIS) has published its Global Insurance Market Report: Mid Year Update, which provides a mid-year preview of its 2023 Global Monitoring Exercise (GME) results. The GME utilises data from major international insurance groups and global supervisors, covering more than 90% of gross written premiums.
The interim results indicate slight declines in solvency, profitability, and liquidity positions at the end of 2022 compared to the previous year. These declines were primarily driven by lower asset valuations. Additionally, aggregate systemic risk scores decreased by the end of 2022.
Analysis revealed limited direct interconnectedness between the insurance and banking sectors. However, second round effects and the lessons leaned from recent bank failures, including the speed at which crises unfolded, are still relevant.
Key themes identified for the 2023 GME are the risks faced for insurers in the challenging macroeconomic environment, particularly interest rate, liquidity, and credit risks. The GME will also focus on structural shifts in the life insurance sector, such as the use of cross-border asset-intensive reinsurance and increased capital allocation to alternative assets.
The full Global Insurance Market Report (GIMAR) will be published in December and will provide more comprehensive details on systemic risk developments, solvency, profitability, liquidity positions, and an in-depth analysis of the key themes discussed during the 2023 GME. The report aims to facilitate effective risk management and oversight in the insurance industry.