IAIS expects insurers to weather 2025 with solid reserves

Risks also led to wider corporate bond spreads and declines in asset and commodity prices.

The insurance sector will likely face an uncertain 2025, with financial market volatility and escalating trade tensions creating headwinds, according to the International Association of Insurance Supervisors (IAIS). 

Whilst inflation pressures have eased and global GDP growth stabilised at 3% in 2024, the growth rate is expected to slow to 2.8% in 2025 before recovering to 3% in 2026—below earlier forecasts.

In April 2025, intensified trade tensions triggered a sharp sell-off across global equity markets, wiping out over $10t in value at the lowest point. 

The turmoil also led to wider corporate bond spreads and declines in asset and commodity prices, raising concerns over a broader economic slowdown. 

Although markets have since rebounded, the volatility has exposed underlying vulnerabilities in the global economy, the IAIS said in its latest Global Insurance Market Report (GIMAR).

Despite these pressures, insurers have generally remained resilient, supported by strong capital reserves, diversified asset exposures, and disciplined asset-liability management.

However, the sector’s performance has been uneven. Some insurers saw their solvency positions strained by falling interest rates and widening bond spreads, underscoring the risks posed by macroeconomic uncertainty.