General insurers’ profitability is expected to remain stable or improve next year supported by investment returns and as businesses pursue growth and leverage technology, according to an International Association of Insurance Supervisors report.

“Insurers are focusing on growth through underwriting new business, making strategic acquisitions, repositioning assets and leveraging digital tools and artificial intelligence-driven analytics to improve efficiency and customer engagement,” it says in its annual global insurance market report.

The overall outlook for life and non-life insurers remains stable “albeit amid an uncertain macroeconomic and geopolitical landscape”. 

IAIS executive committee chair Shigeru Ariizumi says the report – drawing on data to the end of 2023 and more recent information – underscores resilience and stability in insurance, reflecting effective risk management and robust financial performance.  

“The report’s analysis highlights the sector’s ability to address challenges and navigate future uncertainties, thereby ensuring its continued resilience,” he said.

Insurers had increased total assets and stable solvency and profitability levels at the end of 2023, supported by underwriting performances and investment returns.

Liquidity positions improved slightly, with insurers focusing on maintaining adequate buffers, while systemic risk scores remain significantly lower than those of banks.

The report highlights the increasing frequency and severity of natural catastrophes due to climate change, emphasising the need for better tools and data to assess risks and coverage costs.

IAIS will next year publish a report on the financial stability implications of natural catastrophe protection gaps.