Laura WilesThe PRA has published a Dear CEO letter to PRA-regulated insurance firms, setting out its supervision priorities for 2025.
The key priorities reflect the ongoing developments in the context for life and general insurers, and the need for robust governance and risk management. They also factor in the completion of the Solvency II review, and changes firms will need to make to deliver the objectives under the significantly reformed framework.
On developments to the insurance industry, the PRA will be focussing on:
- Solvency UK implementation and other policy reforms
- BPA market developments, including funded reinsurance
- Cyclicality in the general insurance market
On evaluating and maintaining resilience, the PRA has flagged:
- Solvent exit planning for insurers – the PRA recently published its new rules, and will be working to support in-scope insurers to understand the regulator’s expectations prior to implementation
- Operational resilience, cyber security and third-party risk – the PRA intends to consult with the FCA in H2 2025 on policy relating to the management of ICT and cyber risks
- Climate
- Liquidity resilience
- The incoming Life Insurance Stress Test