Page 46 - The Insurance Times July 2025

its implications for insurers’ operations, balance sheets scores stable”, said Jonathan Dixon, IAIS Secretary General.
and risk management frameworks. “Yet caution remains as market volatility and global eco-
nomic headwinds pose emerging challenges to balance
Other areas of increased supervisory sheets. The 2025 GME reflects the IAIS’ commitment to

focus identifying and responding to emerging risks in the insurance
sector.”
Additional focus areas for analysis include cyber risk and cli-
mate-related risks. As part of the GME process the IAIS will
The year-end 2025 GIMAR will be published in December
consider the extent to which insurers are able to identify
and will elaborate on key potential systemic risk develop-
cyber risks, transparently apply policy exclusions and man-
ments in the insurance sector relative to those in the
age their underwriting exposure. The year-end GIMAR will
banking sector and examine in detail solvency, profitability
again include an assessment of climate-related risks in a
and liquidity positions. Data analysis on individual insurers
dedicated chapter.
and sector-wide themes will be enriched by input collected
“The GIMAR mid-year update underscores the continued through a feedback loop with supervisors, followed
resilience of the insurance sector, with solvency, liquidity and by a collective discussion among insurance supervisors in
profitability positions remaining strong and systemic risk September.

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Demand for embedded insurance through digital plat- 1. Foster Foresight Culture: Embed early risk identifica-
forms. tion in governance structures.
Reinsurance Sector 2. Invest in Data and Scenario Modelling: Leverage AI,
Continued capital strain from secondary perils and ret- big data, and collaboration with academia to build bet-
rocession shortages. ter risk models.
Risk of model misspecification due to novel climate or 3. Redesign Products and Pricing: Adapt insurance offer-
health scenarios. ings for emerging needs and integrate behavioral eco-
Need to rebalance global portfolios in light of regional nomics.
risk clustering. 4. Collaborate Across Borders: Share risk data, standards,
Life and Health Insurance and approaches globally, especially for climate and pan-
Increased longevity combined with non-communicable demic risks.
disease trends. 5. Strengthen Regulatory Dialogue: Engage with regulators
Opportunities in preventive health models linked to early on AI, climate, and emerging coverage models.
wearables and telehealth. 6. Advance ESG Integration: Build resilient portfolios that
Need for mental health integration in underwriting and consider environmental and social performance along-
benefits. side returns.
Property & Casualty
Catastrophic risk exposure rising in frequency and se- Conclusion
verity. The Swiss Re SONAR 2025 report is a clarion call for the
Demand for parametric insurance for underinsured global insurance sector to move from reactive to proactive
perils. risk management. With interconnected and fast-evolving
Urbanization-related risk accumulation. threats ranging from cyber and climate to mental health
and macroeconomics, insurers must adapt their underwrit-
9. Recommendations and Strategic Con- ing, products, and risk culture. Collaboration, innovation,
siderations and foresight will be key in shaping a resilient insurance
ecosystem fit for the challenges of the future.
The SONAR 2025 report concludes with strategic insights for
insurers and policymakers: Courtesy https://www.swissre.com/

The Insurance Times July 2025 41