The International Association of Insurance Supervisors (IAIS) has described the global insurance sector as remaining ‘well-functioning and stable amid an often challenging environment during 2014’.
As evidence, the IAIS pointed to the high capital levels held by insurers, the overall stable profitability shown by the sector and a continuing inflow of additional (including alternative) capital.
It noted, however, that while capital inflows strengthen solvency and generate additional diversification opportunities, they also exercise downward pressure on market prices for different forms of risk transfer. The IAIS’ Global Insurance Market Report 2014 also highlighted a further strengthening of risk management and corporate governance by insurers.
In the report, the IAIS called for greater supervisory focus on the risks emerging from new trends and developments in the market, such as internationalisation of insurance groups, sectorial concentration, and overall underwriting discipline