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      KPMG updates

      Impact of data risk

      The KPMG Risk Consulting team highlights how data risk has become a critical organisational challenge, warning that it now ranks among the most significant threats to successful technological adoption. This can arise when data is incomplete, inaccurate, outdated, unavailable, over‑retained, insecure, or used in ways that breach legal or contractual requirements. The article highlights that poor data management can lead to financial loss, bad decisions, reputational damage, regulatory penalties and reduced trust, especially as global data volumes grow.

      With breach costs rising and business disruption increasing, the piece emphasises that organisations with modern, proactive data‑risk practices recover faster and spend less, while also enabling technology adoption, operational efficiency and organisational change.

      General Scheme of the Regulation of Artificial Intelligence Bill 2026

      The KPMG Risk and Management Consulting Teams explore the new General Scheme of the Regulation of Artificial Intelligence Bill 2026 that will implement a national framework needed to implement the EU AI Act, introducing a distributed regulatory model where existing sectoral regulators, such as the Central Bank of Ireland, the Data Protection Commission and Coimisiún na Meán, will supervise AI within their respective domains.

      It also creates a new National AI Office (Oifig Intleachta Shaorga na hÉireann) as the central coordinating authority tasked with supporting enforcement, promoting responsible AI adoption, and providing technical expertise.

      Newly launched thought leadership 

      • The rise of agentic AI in financial services - KPMG and Oracle have partnered with The Economist on a paid editorial campaign, “Agents of Change: Rise of the Autonomous Enterprise,” which explores how enterprise leaders across finance, operations, HR, and strategy are preparing for the next phase of AI evolution — marked by the rise of agentic AI.

        The first article focuses on Financial Services and showcases perspectives on how organisations are integrating AI agents to help streamline operations, reduce risk, and accelerate growth. Read the article here.
      • The Pulse of Fintech H2 2025 is a bi-annual global analysis of fintech funding. After three years of declining investment, the fintech market globally turned a corner in 2025, with growing deal sizes and growing excitement — particularly in the digital assets space. Learn more online.
      • Greenwashing in financial services: Regulation and realities - The recent episode of the Future of Tax & Legal podcast explains why greenwashing is still a major risk for financial services. Listen here.
      Niall Naughton
      Niall Naughton

      Partner, Head of Insurance

      KPMG in Ireland

      Central Bank of Ireland updates

      Central Bank: Consultation on Prohibition Notices Under the Fitness and Probity Regime (CP166)

      The Central Bank is seeking feedback on new supplemental guidance that explains how it will use prohibition notices within the Fitness and Probity (F&P) regime. The paper clarifies how the Central Bank assesses the nature, scope and duration of a prohibition, procedures for the cessation, termination or publication of prohibition notices and is intended to supplement the existing 2023 Guidance on F&P investigations as updated under the Individual Accountability Framework. The consultation paper is open for responses until 25 March 2026.

      Central Bank: Supervisory Priorities for 2026

      The Central Bank has published a letter outlining its 2026 regulatory and supervisory priorities and provided Government with advice on strengthening economic resilience amid heightened geopolitical, technological and climate‑related risks. Governor Gabriel Makhlouf noted that, for 2026, the Central Bank's supervisory priorities centre on bolstering financial and operational resilience, enhancing consumer and investor protection, responding to rapid technological change, including AI and payments innovation, and ensuring firms address climate‑related risks.

      Central Bank: Regulatory & Supervisory Outlook

      The Central Bank has published the third edition of it’s Regulatory & Supervisory Outlook for 2026. The report highlights a complex macroeconomic, geopolitical and technological environment, with firms expected to strengthen financial and operational resilience while prioritising consumer and investor protection. The report sets out major supervisory priorities for 2026, including ensuring robust governance and cyber/operational resilience, implementing the revised Consumer Protection Code (effective March 2026), enhancing treatment of vulnerable customers, supporting responsible AI adoption, and embedding climate and environmental factors into firms’ strategies and risk frameworks.

      European Insurance and Occupational Pensions Authority updates

      EIOPA: January Insurance Risk Dashboard

      The European Insurance and Occupational Pensions Authority (EIOPA) has published its January 2026 Risk Dashboard for insurance undertakings, indicating overall risk in the European insurance sector at a stable ‘medium’.

      EIOPA note that the macroeconomic backdrop is supported by steady GDP growth and easing inflation. The outlook is increasingly clouded by rising geopolitical tensions involving Venezuela, Iran and emerging disputes around Greenland.

      EIOPA explain that financial markets remain vulnerable to valuation pressures, with concerns that an AI‑driven asset price correction could trigger sharper volatility, even if default risks remain contained. Furthermore, they note that credit and liquidity conditions are broadly steady, though higher issuance and refinancing needs suggest emerging pressures.

      EIOPA: IRRD: Technical Standards for Insurance Recovery and Resolution Framework (IRRD)

      EIOPA has published the first six of instruments to support the implementation of the IRRD. The instruments will introduce a dedicated recovery and resolution framework for European Insurers when it becomes operational in 2027. The publications include:

      • Final report (PDF, 490KB) on the Draft Regulatory Technical Standards (RTS) on the content of pre-emptive recovery plans
      • Final report (PDF, 570KB) on the Draft RTS on criteria for pre-emptive recovery planning requirements and methods to be used when determining the market shares
      • Final report  (PDF, 517KB) on the Draft RTS on the content of resolution plans and group resolution plans 
      • Final report on the Guidelines on the criteria for the identification of critical functions
      • Final report on the Guidelines on the assessment of resolvability
      • Final report on the Guidelines on measures to remove impediments to resolvability and the circumstances in which each measure may be applied 

      EIOPA: Opinion on Technical Advice on the Draft Revised ESRS

      EIOPA has issued its opinion (PDF, 456KB) on the European Financial Reporting Advisory Groups (EFRAG) technical advice regarding the draft revised European Sustainability Standards (ESRS) following a request from the European Commission. EIOPA’s assessment concentrates on the updates most relevant to the insurance, reinsurance and occupational pension sectors. 

      EIOPA: Supervisory Review Process

      EIOPA have published revised guidelines on the Supervisory Review Process. EIOPA note the revisions aim to improve supervisory consistency and effectiveness by aligning the guidelines with new regulatory developments and integrating enhanced processes. The revised Guidelines will apply from 30 January 2027.

      EIOPA: Treatment of market and counterparty risk exposures

      EIOPA has published (PDF, 277KB) revised Guidelines on the treatment of market and counterparty risk exposures under the Solvency II standard formula. The revisions focus on updating legal references, clarifying wording and simplifying the overall framework. This includes the deletion of four existing Guidelines, targeted amendments to broaden applicability where appropriate, and the introduction of a new Guideline to clarify how leveraged funds should be treated within the standard formula.

      EIOPA: Solvency II: Adoption Measures in NatCat Insurance

      EIOPA has published a consultation paper on the prudential treatment of climate related adaption measures within the Solvency II framework. EIOPA explains it is responding to the persistent NatCat insurance protection gaps in Europe where one quarter of extreme-event losses have historically been insured. The consultation is open until 17 April 2026.

      EIOPA Q&A updates

      07 Jan: Art. 33

      EIOPA gave guidance in Q&A (#3239) on which risk-free curves should be used to discount cashflows, in the scenario where a reinsurer assumes treaties of various currencies which are then entirely retroceded in a single currency.

      12 Jan: S.06.02

      EIOPA gave guidance in Q&A (#3441) for the scenario where a firm cannot obtain up-to-date asset information in a timely manner for its investments as required by Solvency II. EIOPA encourages firms in such positions to reach out to their supervisory authority directly.

      12 Jan: S.06.04

      EIOPA clarified in Q&A (#3462) that when reporting investments exposed to transition risk in relation to total investments, other assets such as loans and mortgages, re-insurance recoverable/receivables and own shares should be excluded.

      12 Jan: Art. 88

      EIOPA gave guidance in Q&A (#3459) on calculating catastrophe risk, given the scenario that an insurer has only one policyholder in a geographic area. EIOPA stated: “The SCR must cover all quantifiable risks. To alleviate operational burden, Solvency II allows for a simplified calculation of the SCR in some situations”.

      13 Jan: Risk – Free Interest Rates - Extrapolation

      EIOPA clarified in Q&A (#3493) that they will be publishing a document covering the methodology of the new extrapolation method for risk-free Solvency II curves.

      20 Jan: Art. 26 – 33, 35 – 39 PEPP

      EIOPA gave guidance in Q&A (#3458) on the calculation methodology for the total annual cost over the term of a Pan-European Personal Pension Product (“PEPP”)

      UK updates

      FCA: MS24/1 – Pure Protection Market Study

      On 29 January 2026, the FCA published a consumer research report of the pure protection market in the UK. The objective of this market study was to understand consumers’ perceptions and experiences of purchasing, holding and claiming on pure protection products

      PRA: 2026 Insurance supervision priorities

      On 15 January 2026, the PRA published their 2026 priorities for their supervision of the UK insurance sector.

      In the life insurance market, the PRA will prioritise monitoring the following:

      • High competition and potential risk levels in the bulk purchase annuity market.
      • Growing use of funded reinsurance. The PRA may take action to address underestimation of risk with explicit restrictions on funded reinsurance.
      • Evolving investment strategies of life firms, especially the growing use of structured and synthetic assets.
      • New and expanding ownership structures, especially in the bulk annuity purchase market.

      In the general insurance market, the PRA will prioritise monitoring the following:

      • Softening underwriting cycles and optimistic underwriting assumptions.
      • Inadequate data quality and standards.

      The additional risks posed by the growth in delegated authority underwriting.

      PRA: Solvency and systemic risk of European life insurers

      On 23 January 2026, the PRA published a working paper covering the solvency and systemic risk faced by systemically important European Life insurers. The paper draws a distinction between solvency and systemic risk:

      • Solvency risk arises when the value of a life insurer’s assets falls below a certain threshold in proportion to its liabilities.
      • Systemic risk is the expected capital shortfall of an insurer conditional on the overall European life insurance sector being in distress.

      The study found that European life insurers have been growing in systemic risk exposure since 2007. The main conclusion of this paper is that there is a case for prudential regulation to consider adding a systemic component to capital adequacy that is linked to the life insurer's contribution to systemic risk.

      PRA: Speeches

      In January 2026, the PRA published the following speeches:

      • Getting fit for the future − speech by Afua Kyei (Executive Director, Finance, Bank of England)
      • The sky’s the limit: shaping the UK’s digital financial future - speech by Sasha Mills (Executive Director, Financial Market Infrastructure, Bank of England)
      • Forks in the Curve: whether and how to respond to monetary policy divergence - speech by Megan Greene (Member of the Monetary Policy Committee, Bank of England)
      • Global imbalances in a more fragmented world – remarks by Andrew Bailey (Governor, Bank of England)
      • The evolution of the Bank’s approach to resolution − speech by Dave Ramsden (Deputy Governor, Bank of England)
      • Driving over the peak, or a false summit? − speech by Alan Taylor (External member of the Monetary Policy Committee, Bank of England)

      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.

      Niall Naughton
      Niall Naughton

      Partner, Head of Insurance

      KPMG in Ireland

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