Insurance Insights May 2026

KPMG updates

KPMG pre-Budget 2027 submission

The KPMG tax team (lead by Orla Gavin, Partner, Head of Tax) in its pre-budget submission calls for Ireland to rethink its tax strategy to maintain competitiveness and strengthen economic resilience in an uncertain global environment characterised by geopolitical tensions and evolving international tax rules.

The submission emphasises the importance of a stable and predictable tax framework to support investment, innovation and employment, while also advocating measures to unlock domestic capital and broaden the economic base beyond multinational-led growth.

Key recommendations include enhancing competitiveness for both Foreign Direct Investment (‘FDI’) and domestic businesses and reducing capital taxes to encourage investment and recycling of funds into Irish enterprises.

Embedding AI in transformation programmes

Emma Coogan (Director, KPMG EU AI Hub) in this article explores how Artificial Intelligence (AI) is challenging traditional governance models and the frameworks that are needed to keep pace.

The article explains that AI adoption is advancing faster than the governance frameworks needed to oversee it, creating a gap between perceived and actual decision-making control.

Insurance Tax Forum

The forum, led by Ciara Wrafter, was held in Platform X on 21 May. It brought together industry professionals to discuss recent developments, showcasing KPMG expertise and exploring the client perspectives.

The session focused on VAT Grouping, recent experience with Revenue in relation to Employment Taxes, the OECD Side-by-Side agreement as well as looking ahead to the implementation of IFRS 18.We hope you can join us for the next one.

Niall Naughton

Partner, Head of Insurance

KPMG in Ireland

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Central Bank of Ireland updates

Central Bank: Blog

The Central Bank of Ireland has published a blog by its Governor, Gabriel Makhlouf, titled “Policy priorities in an uncertain world.”

In it, Mr Makhlouf notes that heightened global uncertainty, driven primarily by geopolitical conflict in the Middle East, represents the key challenge facing policymakers. He notes that this uncertainty is weighing on growth, inflation and financial stability, with downside risks such as supply chain disruption and market volatility remaining prevalent.

The blog highlights the importance of maintaining resilience and policy readiness to address evolving risks, including potential second‑round inflation effects, while also recognising the increasing significance of structural developments such as artificial intelligence and digital financial innovation.

European Insurance and Occupational Pensions Authority Updates

EIOPA: Insurance Risk Dashboard

EIOPA has published (PDF, 1.4MB) its Insurance Risk Dashboard for April 2026 that indicates the overall risk in the European Insurance Sector remains stable at a medium level. EIOPA notes that the outlook is increasingly shaped by the geopolitical tensions and slightly higher inflation expectations.

EIOPA: Risk Dashboard for Institutions for Occupational Retirement Provision

EIOPA has published its April Risk Dashboard for Institutions for Occupational Retirement Provisions (IORPs). EIOPA highlight that geopolitical tensions and inflationary pressures are the key drivers of risk for European occupational pension funds, contributing to heightened market volatility, widening bond spreads, and increased sensitivity to asset valuation risks.

EIOPA: Draft technical advice on minimum common standards for insurance guarantee schemes

EIOPA has published a press release announcing a public consultation on its draft technical advice setting out minimum common standards for insurance guarantee schemes (IGS) across the EU. The consultation responds to a European Commission (EC) request and build’s on EOPA’s earlier work under the Solvency II review.

EIOPA: Updated Risk-Free Rate Documentation

EIOPA has published an updated version of the Risk-Free Rate (RFR) Technical Documentation, reflecting amendments to the Solvency II Directive and Delegated Regulation. The updated documentation will apply from 30 January 2027 and EIOPA intends that it will enhance transparency around the calculation of risk-free interest rate term structures.

Other European and International Supervisory Authority Updates

IAIS: Newsletter April 2026

The International Association of Insurance Supervisors (IAIS) published its newsletter for April 2026. The newsletter highlights the organisation’s ongoing focus on strengthening the resilience of the global insurance sector, particularly through supervisory efforts to address natural catastrophe (NatCat) protection gaps and improve financial inclusion.

IAIS: Public consultation on customers receiving value from insurance products

The IAIS has launched a consultation on a draft issues paper on customers receiving value from insurance products, aimed at improving understanding of how insurers deliver value. It recognises that insurance products do not always provide a strong value, which can result in poor customer outcomes and undermine trust in the sector. Feedback is invited on the draft issues paper until 28 July 2026.

EIOPA Q&A Updates

22 April: S.06.02

EIOPA clarified in Q&A (#3508) that field C0320 External Rating does not have any validation and can take any value.

22 April: Solvency II updates – YE 2026

EIOPA clarified in Q&A (#3504) that Solvency II Taxonomy 2.8.2 applies to YE 2026 reporting, with Level 1 and 2 changes and updated reporting requirements only taking effect from January 2027. The ITS on reporting and detailed taxonomy plans are still under review and will be published later. For YE 2026, all SFCR content (including templates) should follow the current Solvency II requirements.

22 April: Risk-free rate & volatility adjustment

EIOPA clarified in Q&A (#3530) that they plan to publish a workbook demonstrating the new risk-free rate extrapolation and volatility adjustment calculation methods in Q2 2026.

22 April: DORA – Article 3 (60-64)

The EU Commission provided guidance in Q&A (#3100) on how insurance intermediaries should determine whether they meet the 250FTE criterium.

UK updates

FCA: Financial advice firms survey 2025

On 23 April 2026, the Financial Conduct Authority (‘FCA’) published the findings of their survey of financial advice firms. Despite consolidation and shifts in market structure, the number of advisors remains unchanged since 2021 at 31,000.

FCA: Complaints Data H2 2025

On 28 April 2026, the FCA published their analysis of the complaints financial services firms reported to the FCA for the second half of 2025. The Insurance and Pure Protection product group saw a 10% increase in the number of complaints. All other product groups saw a decrease in complaints. Motor and transport insurance products saw a 33% increase in complaints.

PRA: Perspective on general insurance protection gaps

On 16 April 2026, the Prudential Regulatory Authority (‘PRA’) published their regulatory perspective on the protection gaps present in the UK general insurance market. A protection gap is the difference between the amount of insurance coverage that is economically beneficial and the amount actually purchased. This review covers the following:

How protection gaps interact with the PRA’s objectives
How the PRA’s approach to policy and supervision affect the risk of protection gaps arising
What role the PRA should play in efforts to address protection gaps

PRA: PS12/26 – Review of the Senior Managers and Certification Regime − Phase 1

On 22 April 2026, the PRA published phase 1 of their proposed reforms to the Senior Managers and Certification Regime (SM&CR). The SM&CR was put in place to ensure senior management are accountable for their actions, following the financial crisis. These reforms aim to streamline the regime, without undermining its benefits.

PRA: Funded reinsurance – Plans to support resilience in the life insurance industry

On 29 April 2026, the PRA published plans to change the treatment of funded reinsurance. Funded reinsurance involves UK insurers paying a large up-front premium to a reinsurer in exchange for future payments. For the average funded reinsurance, firms hold capital worth 2-4% of their liabilities, compared to 11-15% for similar investments. The PRA believe the continued growth of the funded reinsurance market may undermine the resilience of life insurers.

The changes will mean funded reinsurance will be treated more like other investments that UK life insurers hold, ending a regulatory inconsistency. The proposed changes are expected to increase the average capital held for a funded reinsurance transaction to 10%. This should reduce the incentive to choose funded reinsurance over similar investments.