Fitch says regulators adopt growth-friendly rules for insurers

Australia is proposing lower capital requirements for insurers.

Fitch Ratings says regulators in Asia-Pacific (APAC), Europe, the Middle East, and Africa (EMEA) are adopting more growth-friendly measures for the insurance sector, according to its latest global regulatory update covering April to September 2025.

In China, regulators announced a 10% reduction in capital charges for equity investments, also to promote greater insurer participation in corporate financing.

Australia is proposing lower capital requirements for insurers that improve their asset-liability matching, a change expected to make annuity products more competitive. 

Meanwhile, the UK is seeking to stimulate innovation and market expansion by reforming its risk transformation framework for the London market.

However, both the US and UK have raised concerns about the growing use of funded reinsurance treaties in life insurance.

The US has introduced an asset adequacy test to ensure proper cash-flow matching, whilst the UK signalled that it may tighten oversight of such arrangements.

In Europe, the European Commission has proposed lowering capital charges for certain long-term equity investments and senior tranches of securitisations. 

The move aims to encourage insurers to invest more in the corporate sector to boost economic growth.