Regulatory Change Emerges as Top Risk for Global Insurance Industry
Regulatory change has been identified as the most significant risk facing the global insurance industry, as insurers navigate an increasingly complex and fragmented policy environment. Evolving rules across jurisdictions are re- shaping how insurers manage capital, price risk, design products and comply with supervisory expectations, creating operational and strategic challenges for the sector.
Insurers are facing heightened regulatory scrutiny driven by concerns around financial stability, consumer protection, climate risk, data privacy and the use of emerging technologies. New and amended regulations are requiring firms to invest heavily in compliance systems, reporting frameworks and governance structures. Differences in regulatory approaches between regions are further complicating operations for multinational insurers, in- creasing compliance costs and execution risk.
One of the key pressures stems from the pace and volume of regulatory change. Insurers must adapt to over- lapping requirements related to solvency, conduct, sustainability disclosures and technology governance, of- ten within tight implementation timelines. This has placed strain on internal resources and increased reliance on specialised compliance and risk management capabilities.
Regulatory uncertainty is also influenc- ing strategic decision-making. Product innovation, market entry and cross- border expansion are increasingly shaped by regulatory feasibility rather than purely commercial considerations. In some cases, insurers are reassessing exposure to certain markets or lines of business due to rising compliance bur- dens and supervisory expectations.
UN Forum Launches Global Transition Plan Guide for Insurance Underwriting
A United Nations backed forum has launched a first-of-its-kind global transition plan guide aimed at helping insurers align their underwriting portfolios with climate transition objectives. The initiative is designed to support insurance companies in managing climate- related financial risks while contributing to the global shift towards a low-carbon and climate-resilient economy.
The guide focuses on underwriting ac- tivities, an area that has received com- paratively less structured guidance than investment portfolios in climate transition planning. It provides insurers with a practical framework to assess exposure to transition risks, set cred- ible targets and integrate climate con- siderations into underwriting decision- making across sectors and geographies.
The framework encourages insurers to identify high-emission and climate-sensitive sectors within their underwriting portfolios and develop strategies to engage with clients on transition path- ways. This includes setting expectations around risk mitigation, encouraging improved disclosure, and gradually adjusting underwriting appetite in line with climate goals and regulatory expectations.
The guide also emphasises governance and accountability. Insurers are encouraged to embed transition planning within enterprise risk management frameworks, ensure board-level over- sight and establish internal processes for monitoring progress. Transparency and consistency in disclosures are high- lighted as essential to building credibility with regulators, investors and other stakeholders.
