Public consultation on draft Issues Paper on structural shifts in the life insurance sector
The consultation closed on 02 June 2025.
Background information
Over the past years, the IAIS has closely monitored structural shifts within the life insurance sector identified through its Global Monitoring Exercise (GME).
A primary focus has been the insurance sector’s increasing allocation to alternative assets and the rising adoption of cross-border asset-intensive reinsurance (AIR). These trends were driven in part by the prolonged low-interest rate environment in several regions, prompting insurers to seek higher yields and move away from capital-intensive products. However, these trends have persisted in an environment of higher interest rates.
The primary objective of this Issues Paper is to provide a comprehensive analysis of these structural shifts. It explores these emerging trends in greater detail, provides a framework for understanding macroprudential and financial stability implications and identifies potential areas for enhancement in the IAIS supervisory material.
More specifically, the main focus areas for this Issues Paper are:
- Alternative assets:
- Defining alternative assets, using principles and criteria to classify these investments;
- Understanding current trends in alternative assets and the drivers behind this trend; and
- Evaluation of issues such as hidden leverage, liquidity risks, credit risk and credit ratings, as well as regulatory capital-related issues associated with alternative assets.
- AIR:
- Gaining a better understanding of AIR;
- Understanding how jurisdictional differences in reserving, capital requirements and investment flexibility are driving the rise in AIR activity; and
- Summarising supervisory risk assessments and corresponding supervisory responses to these risks.
- Macroprudential and financial stability considerations:
- Outlining macroprudential considerations, interconnectedness with broader markets and financial stability risks.
- Review of IAIS supervisory material:
- Identifying potential areas for enhancement in the IAIS supervisory material to effectively regulate and supervise the risks identified around these structural shifts.
The IAIS is currently reviewing responses to a public consultation on draft Issues Paper on structural shifts in the life insurance sector.
A public background session webinar was held on 3 April 2025, 13:00 – 14:30 CEST to present the draft Issues Paper and answer any questions from stakeholders. Click here for the replay.