KPMG updates
Insurance transformation: The new agenda
The KPMG Insurance Strategy and Transformation team (led by Matthew Smith, Global Lead for Insurance Strategy and Transformation, and Partner) highlights that insurance companies are increasingly prioritising operational and cost transformation to stay competitive amid market disruption.
Despite ambitious goals, such as reducing costs by at least 10% by 2030, only a quarter of transformation efforts are seen as highly successful. The report notes that most effective insurers are those that align transformation with strategic objectives, invest heavily in technology and digital platforms, and focus on sustainable performance improvements across operations, talent, and compliance.
KPMG Summer Economic Outlook
In this article, the KPMG Strategic Economics Team (led by Darragh McGreal, Director - Head of Strategic Economics) explores how Ireland’s economy continued to grow in the first half of 2025 despite global uncertainties, including proposed US tariffs and geopolitical tensions. The report discusses that growth was driven by strong domestic demand and a surge in exports by US multinationals based in Ireland, who acted ahead of potential tariffs.
While global investment decisions have slowed, Ireland’s labour market remains strong, inflation is easing, and interest rates have fallen. The strategic economics team forecasts GDP growth of 3.3% or more in 2025, with slightly slower growth expected in 2026 as trade impacts take hold.
Central Bank Updates
Central Bank: Leadership Appointment
The Central Bank of Ireland (the Central Bank) has appointed Colm Kincaid as Deputy Governor, Consumer & Investor Protection, effective 1 August 2025. In this role, Mr Kincaid will join the Executive Leadership Team and lead the strategic development and implementation of policies focused on consumer and investor protection.
Central Bank: Cross-Industry Guidance on Operational Resilience
The Central Bank has published its updated Cross-Industry Guidance on Operational Resilience (July 2025) that outlines expectations for regulated firms to strengthen their ability to withstand, respond to, and recover from operational disruptions.
The guidance is built around three pillars: identifying and preparing for critical business services and risks; responding and adapting through effective continuity and incident management; and recovering and learning by embedding continuous improvement.
The revised guidance emphasises a board-led, firm-wide approach and encourages proportionate implementation based on each firm’s size, complexity, and risk profile
European Insurance and Occupational Pensions Authority Updates
EIOPA: Use of Generative AI
The European Insurance and Occupational Pensions Authority (EIOPA) has launched a public consultation on proposed changes to supervisory reporting and public disclosure requirements under Solvency II. The aim is to reduce the reporting burden on (re)insurance companies while maintaining effective oversight. The consultation includes amendments to the Implementing Technical Standards (ITS), revised guidelines for financial stability reporting, and updated supervision guidelines for third-country insurance branches. Stakeholders are invited to submit feedback by 10 October 2025.
EIOPA: Opinion on the supervision of liquidity risk management of Institutions for Occupational Retirement Provision (IORPs)
EIOPA has issued an opinion on the supervision of liquidity risk management for Institutions for Occupational Retirement Provision (IORPs). The Opinion sets out expectations for national supervisors to enhance the monitoring, assessment, and management of liquidity risks within IORPs. The goal is to strengthen the financial stability of pension institutions, safeguard the broader financial system, and improve protection for pension scheme members and beneficiaries. This follows a public consultation held in late 2024.
EIOPA: Revised Guidelines on Exchange of Information within Colleges
EIOPA has published a consultation paper proposing updates to the framework governing how supervisory authorities across the EU exchange information about cross-border insurance groups. The aim is to enhance cooperation, consistency, and efficiency among national supervisors by clarifying roles, improving communication protocols, and aligning with recent regulatory developments. The consultation seeks stakeholder feedback the revised Guidelines on Exchange of Information on a Systemic Basis within Colleges to ensure effective supervision of insurance groups operating in multiple jurisdictions. Stakeholders are invited to submit feedback by 14 October 2025.
EIOPA: Solvency II: Technical Standards
EIOPA has submitted three regulatory technical standards and published one set of revised guidelines to support the implementation of the reviewed Solvency II Directive. These documents address various aspects, including the identification of insurance undertakings under dominant or significant influence, and criteria for determining the relevance of undertakings in the context of supervising cross-border activities. The European Commission (EC) has three months to decide on the adoption of the draft technical standards. If adopted, these standards will guide the implementation of Solvency II. The published documents include:
- Regulatory technical standards on undertakings under dominant/significant influence or managed on a unified basis
- Regulatory technical standards on the relevance of cross-border activities of undertakings
- Implementing technical standards on the lists of regional governments and local authorities’ exposures
- Revised Guidelines on undertaking-specific parameters.
EIOPA: Mass-Lapse Reinsurance and Reinsurance Termination Clauses
EIOPA has published two annexes to its 2021 Opinion on the use of risk-mitigation techniques by insurance undertakings:
- Annex I: Mass-Lapse Reinsurance
Provides detailed guidance to supervisors on the prudential treatment of mass-lapse reinsurance. It aims to establish a common understanding of the key elements supervisors should consider when assessing whether the capital relief from such treaties is proportionate to the actual risk transfer. - Annex II: Reinsurance Termination Clauses
Focuses on certain features of reinsurance agreements’ termination clauses that may undermine the effective transfer of risk. Specifically, it highlights provisions that release the reinsurer from any responsibility for their portion of legitimately incurred losses during the period covered by the reinsurance treaty.
EIOPA: IRRD: Resolution Colleges and Reporting Requirements
EIOPA has opened a consultation on two key aspects of the forthcoming Insurance Recovery and Resolution Directive (IRRD) which will take effect in 2027 and introduces a recovery and resolution framework tailor-made for (re)insurers in Europe:
- Consultation Paper I: Draft Regulatory Technical Standards define the criteria and governance for establishing and operating resolution colleges. These colleges will coordinate the development of resolution plans, assess resolvability, and address potential impediments at the group level.
- Consultation Paper II: Draft Implementing Technical Standards specify the procedures and standardised templates insurers must use when submitting information to resolution authorities. These proposals aim to balance the need for effective resolution planning with minimising reporting burdens, leveraging existing Solvency II processes where possible.
The consultation remains open until 30 October 2025.
EIOPA: Solvency II: Follow up to Peer Review on Outsourcing
EIOPA has published a report following on from its 2022 peer review on outsourcing under the Solvency II framework. The report assesses progress made by National Competent Authorities (NCAs) across the EEA on the 77 recommended actions from its 2022 peer review on outsourcing.
The report highlights improvements in regulatory tools, guidance, and internal procedures, with structured notifications and enhanced documentation supporting a more data-driven, risk-based supervisory approach. Areas needing further attention include off-site supervision, full operationalisation of supervisory tools, and consistent embedding of internal procedures.
EIOPA encourages NCAs to continue strengthening supervisory practices and may issue further guidance or facilitate best practice exchanges.
EIOPA: Integration of Climate Change into Insurers’ Risk Assessments
EIOPA has published a statement on the findings of a monitoring exercise exploring how (re)insurers in Europe are integrating climate change-related risks in their Own Risk and Solvency Assessment (ORSA). The exercise follows EIOPA’s 2021 opinion on the supervision of climate change risk scenarios in ORSA, as well as a related application guidance aimed at establishing consistent practices.
EIOPA note the results of the monitoring exercise show that insurers have made important progress in integrating climate change-related risks into their risk management frameworks. EIOPA explain that most insurers in the scope of the exercise now include climate change risk assessments in their ORSAs, covering both physical and transition risks. EIOPA will continue supporting supervisory convergence and capacity building in this area.
Other European and International Supervisory Authority Updates
EC: Solvency II Delegated Regulations
The European Commission has proposed amendments to the Solvency II framework aimed at boosting long-term investment by insurers while safeguarding financial stability and policyholder protection. Key changes include tailored rules for long-term equity investments, reduced sensitivity to short-term market volatility, lower capital charges for securitisations, simplified requirements for smaller insurers, updated catastrophe risk calibrations based on climate science, and recognition of insurers’ role in mobilising private capital for EU priorities. Feedback is open until September 2025, with a final proposal expected in Q3 2025.
European Commission: High-Risk AI Systems
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.
EIOPA Q&A
EIOPA Q&A Updates
Please see below for EIOPA’s response to recent queries which have been raised by the public for further clarification on the Solvency II requirements. The Solvency II requirements may change or become more prescriptive over time.
06 Jun: E.01.01
EIOPA clarified in Q&A (#3348) that template E.01.01 shall be reported on a line-by-line basis for deposits to cedants, in contrast to the aggregated single-line reporting for CIC 75 in template SE.06.02.
06 Jun: S.14.01
EIOPA clarified in Q&A (#3318) that commission claw-backs should be included in C0071 if a national option under IDD permits such mechanisms. C0071 reflects total payments made by an insurer to a distributor.
06 Jun: CIC (Annex) S.06.02
EIOPA clarified in Q&A (#3303) that entities should apply a consistent and well-reasoned assessment when assigning CIC codes. EIOPA provided indicative guidance for various instruments but did not confirm specific treatments.
06 Jun: S.06.04
EIOPA clarified in Q&A (#3292) that unit-linked funds are excluded from S.06.04 reporting due to the policyholder's investment exposure.
06 Jun: S.06.02
EIOPA clarified in Q&A (#3291) that international credit ratings should be used to reflect the creditworthiness of banks, as they assess commitments using a globally applicable scale.
06 Jun: S.06.03
EIOPA clarified in Q&A (#3288) that for CIC 0 assets, entities should apply a consistent and documented methodology to assign country and currency, using best-effort approaches such as country of custody or reporting currency.
06 Jun: S.06.03
EIOPA clarified in Q&A (#3283) that when completing S.06.03, the issuing sector is not relevant. Only the issuing country should be reported, and allocations from RFR Technical Documentation should not be used.
06 Jun: S.06.02
EIOPA clarified in Q&A (#3282) that item C0145 in S.06.02 is only applicable to CIC categories 3 and 4. It is acceptable not to report this item for other CIC categories.
06 Jun: PF.06.02
EIOPA clarified in Q&A (#3271) that the issuer should be the designated fund manager, not the investment manager.
06 Jun: S.06.04
EIOPA clarified in Q&A (#3038) that S.06.04 focuses on NACE sections A to N due to their relevance to transition risk. Other sectors are not excluded, and undertakings may include them if deemed relevant.
06 Jun: S.06.04
EIOPA clarified in Q&A (#2943) that undertakings may use the Battiston methodology to classify assets for climate risk. EIOPA does not mandate a single standard but allows flexibility.
19 Jun: S.32.01, S.36.01, S.36.02, S.36.03, S.36.04, S.36.05
EIOPA clarified in Q&A (#3178) that entities listed in S.36 templates and S.32 should generally match, except for cases like sold entities still relevant for intra-group transactions.
20 Jun: SE.06.02
EIOPA clarified in Q&A (#3233) that for CIC 8, issuer sector must be reported regardless of ISIN presence. EV52 should be followed over EV75 due to its higher severity and alignment with ECB instructions.
Further information
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.
