There is an increasing AI use in insurance—50% in non-life, 24% in life. To address emerging risks, undertakings must clarify supervisory responsibilities, maintain full accountability, and implement proportionate governance. Risk managers should conduct impact-based assessments, emphasizing data sensitivity, consumer impact, and financial exposure. Strong governance includes fairness, data quality, transparency, cybersecurity, and human oversight. Oversight extends to third-party providers, with contractual safeguards required. AI systems must align with existing frameworks like ERM and POG, ensuring traceability, explainability, and resilience throughout their lifecycle. Supervisory convergence across the sector remains a key regulatory goal.
This study explores how natural disasters challenge traditional risk management and insurance mechanisms. Researchers developed a three-strategy evolutionary game model to examine the competition among formal index insurance, informal risk sharing, and non-insurance. The model incorporates insurance company profits to aid optimal pricing. Findings suggest that basis risk and loss ratios strongly influence insurance adoption. Low basis risk and high loss ratios favor index insurance, while moderate loss ratios lead to informal risk sharing. Low loss ratios often result in no insurance uptake. Accurately estimating risk aversion and risk sharing ratios is essential for forecasting index insurance market trends.
The position paper underscores insurance’s central role in financial resilience, noting that roughly 90% of EU consumers hold at least one insurance product. It urges that the new Agenda:
• formally recognize insurance as a strategic enabler of economic and social stability;
• simplify and align regulation to insurance’s specific characteristics;
• support innovation in digitalization and AI with coherent rules;
• streamline consumer disclosures and enhance financial and insurance literacy to aid informed decision‑making.
This Final Report (EBA/RTS/2025/03) presents draft Regulatory Technical Standards (RTS) under the Capital Requirements Regulation (CRR) III. It addresses three mandates:
• An operational risk taxonomy with Level 1 event types, Level 2 categories and supplementary attributes (including ESG and ICT risks), to standardise how institutions classify loss events.
• Criteria for deeming the annual‑operational‑risk loss calculation “unduly burdensome” for certain institutions, allowing temporary waivers.
• Rules for adjusting loss‑data sets when firms merge or acquire entities, including currency conversion, re‑classification and fallback proxies.
Le rapport « 2025 stress test of euro area banks » du 1er août 2025 détaille l'exercice de test de résistance mené par la Banque centrale européenne (BCE) pour évaluer la capacité des banques de la zone euro à résister à des chocs économiques et financiers. Cet exercice projette l'évolution de la position de capital des institutions sur trois ans, de 2025 à 2027, sous un scénario de base et un scénario défavorable hypothétique, ce dernier impliquant une aggravation des tensions géopolitiques. Le document analyse l'impact de ces scénarios sur les risques de crédit, de marché et opérationnels, ainsi que sur la rentabilité des banques, intégrant également les nouvelles règles du Règlement sur les exigences de fonds propres 3 (CRR3). Le rapport conclut que le secteur bancaire de la zone euro est globalement robuste, tout en soulignant la nécessité d'une planification prudente du capital face aux incertitudes actuelles.
𝗘𝗜𝗢𝗣𝗔 released its July 2025 𝙄𝙣𝙨𝙪𝙧𝙖𝙣𝙘𝙚 𝙍𝙞𝙨𝙠 𝘿𝙖𝙨𝙝𝙗𝙤𝙖𝙧𝙙, offering an assessment of the European insurance sector's financial health as of Q1 2025 Solvency II data and Q2 2025 market data. Overall, the report indicates a stable risk landscape at a medium level for the European insurance sector, demonstrating notable resilience. However, it also highlights a negative outlook in certain areas over the next year, influenced by complex global dynamics such as geopolitical tensions and market volatility. Specifically, market risks due to fixed income volatility and cyber and digitalization risks are identified as growing concerns, necessitating continued vigilance despite general stability.
A joint initiative by the American Bankers Association and the Financial Services Coordinating Council supports expanding cloud deployment while aiming to mitigate associated risks. Published July 29, 2025, the ABA Banking Journal outlines collaboration among federal regulators, banks and major cloud providers (AWS, Microsoft Azure, Google Cloud, IBM). It highlights key risks—such as CSP‑related operational incidents, misconfigurations under shared‑responsibility models, monitoring gaps, tool and talent deficiencies, and market concentration. The article details a voluntary 16‑section reference tool covering audit, supply‑chain risk, contractual provisions, operational resilience and more. It aims to enhance transparency, cyber‑resilience and regulatory alignment in cloud adoption.
The guide emphasizes a foundational set of principles that apply across all risk types. These include robust governance, comprehensive documentation, sound data management, and effective model risk management.
This opinion and accompanying report from the 𝗘𝗕𝗔 provides a comprehensive overview of 𝗺𝗼𝗻𝗲𝘆 𝗹𝗮𝘂𝗻𝗱𝗲𝗿𝗶𝗻𝗴 (𝗠𝗟) 𝗮𝗻𝗱 𝘁𝗲𝗿𝗿𝗼𝗿𝗶𝘀𝘁 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 (𝗧𝗙) 𝗿𝗶𝘀𝗸𝘀 across the EU's financial sector from 2022 to 2024. The EBA, mandated to issue such an opinion biennially, identifies evolving threats driven by technological innovation, including vulnerabilities in FinTech, RegTech, and crypto assets, alongside the 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗶𝗻𝗴 𝘀𝗼𝗽𝗵𝗶𝘀𝘁𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗳𝗿𝗮𝘂𝗱 𝗮𝗻𝗱 𝗰𝘆𝗯𝗲𝗿𝗰𝗿𝗶𝗺𝗲 𝘀𝗰𝗵𝗲𝗺𝗲𝘀. While acknowledging positive developments like reduced tax crime risks and improved supervisory engagement in certain areas, the EBA highlights persistent challenges such as 𝗶𝗻𝗰𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝘁 𝗮𝗻𝘁𝗶-𝗺𝗼𝗻𝗲𝘆 𝗹𝗮𝘂𝗻𝗱𝗲𝗿𝗶𝗻𝗴 𝗮𝗻𝗱 𝗰𝗼𝘂𝗻𝘁𝗲𝗿-𝘁𝗲𝗿𝗿𝗼𝗿𝗶𝘀𝘁 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 (𝗔𝗠𝗟/𝗖𝗙𝗧) 𝘀𝘆𝘀𝘁𝗲𝗺 𝗲𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗲𝗱 𝗽𝗿𝗼𝗺𝗶𝗻𝗲𝗻𝗰𝗲 𝗼𝗳 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗱𝘂𝗲 𝗱𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 (𝗖𝗗𝗗) 𝘀𝗵𝗼𝗿𝘁𝗰𝗼𝗺𝗶𝗻𝗴𝘀. The report underscores the critical need for regulatory clarity and a more unified application of risk-based approaches throughout the EU's financial landscape.
This comprehensive report from 𝗘𝗜𝗢𝗣𝗔 provides a 𝗳𝗼𝗹𝗹𝗼𝘄-𝘂𝗽 𝘁𝗼 𝗮 𝗽𝗲𝗲𝗿 𝗿𝗲𝘃𝗶𝗲𝘄 𝗼𝗻 𝗼𝘂𝘁𝘀𝗼𝘂𝗿𝗰𝗶𝗻𝗴, assessing the progress made by 𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗦𝘂𝗽𝗲𝗿𝘃𝗶𝘀𝗼𝗿𝘆 𝗔𝘂𝘁𝗵𝗼𝗿𝗶𝘁𝗶𝗲𝘀 (𝗡𝗦𝗔𝘀) in strengthening their oversight of 𝗼𝘂𝘁𝘀𝗼𝘂𝗿𝗰𝗶𝗻𝗴 𝘄𝗶𝘁𝗵𝗶𝗻 𝘁𝗵𝗲 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝘀𝗲𝗰𝘁𝗼𝗿. It details the 𝗺𝗲𝘁𝗵𝗼𝗱𝗼𝗹𝗼𝗴𝘆 used, the 𝘀𝗰𝗼𝗽𝗲 of the review, and the 𝗲𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗰𝗿𝗶𝘁𝗲𝗿𝗶𝗮 applied to recommended actions. The document highlights 𝘀𝗶𝗴𝗻𝗶𝗳𝗶𝗰𝗮𝗻𝘁 𝗮𝗱𝘃𝗮𝗻𝗰𝗲𝗺𝗲𝗻𝘁𝘀 by NSAs in areas such as 𝗼𝘂𝘁𝘀𝗼𝘂𝗿𝗰𝗶𝗻𝗴 𝗳𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸𝘀, 𝗻𝗼𝘁𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀, 𝗮𝗻𝗱 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁, with many recommended actions being 𝗳𝘂𝗹𝗳𝗶𝗹𝗹𝗲𝗱 𝗼𝗿 𝗽𝗮𝗿𝘁𝗶𝗮𝗹𝗹𝘆 𝗳𝘂𝗹𝗳𝗶𝗹𝗹𝗲𝗱. However, it also identifies 𝗿𝗲𝗺𝗮𝗶𝗻𝗶𝗻𝗴 𝗴𝗮𝗽𝘀, particularly in 𝗼𝗳𝗳-𝘀𝗶𝘁𝗲 𝘀𝘂𝗽𝗲𝗿𝘃𝗶𝘀𝗶𝗼𝗻 and the 𝗳𝘂𝗹𝗹 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝗮𝗹𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝘀𝘂𝗽𝗲𝗿𝘃𝗶𝘀𝗼𝗿𝘆 𝘁𝗼𝗼𝗹𝘀, emphasizing the need for 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗲𝗱 𝗲𝘃𝗼𝗹𝘂𝘁𝗶𝗼𝗻 𝗼𝗳 𝘀𝘂𝗽𝗲𝗿𝘃𝗶𝘀𝗼𝗿𝘆 𝗽𝗿𝗮𝗰𝘁𝗶𝗰𝗲𝘀 to ensure effective and continuous oversight of outsourcing arrangements.