Insurance Insights June 2025

The KPMG Insurance team (Led by Niall Naughton, Partner, Head of Insurance) have published its Insurance Accounting Advisory Quarterly that offers key insights into insurers' second year of reporting under IFRS 17 and IFRS 9. The report noted that while fundamental measurement principles have remained stable, insurers are refining their accounting policies, judgments, and disclosures to increase clarity and comparability across the industry. The report also explores the evolving integration of IFRS 17 elements into key performance indicators and the early consideration of how IFRS 18 might impact future performance reporting.

The KPMG International Audit team (led by Mark Taylor, Audit Quality Leader – Insurance, KPMG International Standards Group) examines the evolving landscape of sustainability reporting in the insurance industry. The report benchmarks the disclosures of major insurers—focusing on key aspects such as transition and extreme weather action plans, financed and insurance-associated emissions, nature and biodiversity considerations, consumer impacts, and business conduct. The analysis reveals that while insurers are adapting to rising regulatory and investor expectations by enhancing their reporting practices, challenges remain in achieving integrated, comparable, and high-quality disclosures that align with frameworks such as IFRS Sustainability Disclosure Standards and the TCFD recommendations.

The KPMG Dublin 2040 team (led by Ryan McCarthy, Managing Partner, KPMG Ireland) published its Dublin 2040 report that produced a blueprint to transform Dublin into a globally competitive and sustainable capital by 2040. The report was launched by Minister Jack Chambers (Minister for Public Expenditure, National Development Plan Delivery and Reform) at an event that brought together government leaders, business experts, and industry stakeholders to address the city's urgent infrastructure challenges, especially in affordable housing, transport, energy, and water, highlighting an estimated need for a approximately €70 billion in investment.

EIOPA published its Financial Stability Report for June 2025. The report assesses Europe’s insurance, reinsurance, and occupational pensions sectors amid a volatile macroeconomic landscape. The report details that despite the sectors remaining robust and well-capitalised under the current framework, it highlights emerging risks from fluctuating exchange rates, interest rates, and equity valuations, alongside increased exposure to geopolitical challenges and cyber threats. EIOPA within the report underline the need for enhanced vigilance and proactive risk monitoring to sustain financial stability across the EU.

EIOPA published its Annual Report for 2024 that outlines the authority’s achievements over a year it characterised as having rapid technological change, geopolitical uncertainty, and evolving risks. EIOPA highlighted significant progress in reinforcing sustainable insurance and pensions by addressing protection gaps, advancing digital transformation and digital resilience, and ensuring robust prudential supervision.

EIOPA has published a response to the European Commission (EC) regarding their consultation on the integration of EU capital markets. EIOPA within their reply emphasised that while the single market is already functioning within the European insurance sector more effective supervision at the EU level is essential for the success of the Savings and Investments Union (SIU) initiative. EIOPA’s response focuses on three key areas the oversight of cross-border business, simplification of the supervision structure and the need for greater consistency in internal models.

The International Association of Insurance Supervisors (IAIS) has published new guidance to support insurance supervisors transitioning to a risk-based solvency (RBS) regime. Developed with the IMF, the document outlines practical steps and key considerations for implementing an RBS framework, emphasising that the transition is a medium- to long-term process. It highlights the importance of tailoring the approach to each jurisdiction’s legal and institutional context, engaging stakeholders throughout, and managing the cultural shift required within supervisory bodies and the insurance sector.

The EC has launched a public consultation to gather input on the implementation of the Artificial Intelligence Act’s (the ‘AI Act’) provisions concerning high-risk AI systems. The consultation seeks practical examples and aims to clarify issues relating to high-risk AI systems. The EC will consider the feedback in upcoming guidelines on the classification of high-risk AI systems and their related requirements and obligations. The AI Act currently identifies two categories of high-risk systems:

• Systems that are important for product safety under the EU’s harmonised legislation on product safety.
• Systems that can significantly affect people’s health, safety, or fundamental rights in specific use cases listed in the AI Act.

Stakeholders are invited to participate in the consultation, which will remain open until the 18 July 2025.

For more on any of the items above, or any Insurance-related queries, contact Niall Naughton, Head of Insurance. We'd be delighted to hear from you.