EIOPA Keynote Outlines Supervisory Priorities on Insurability, Private Credit, AI, and Simpler Rules

Key Takeaways

• In a keynote at the Geneva Association PROGRES-Seminar, EIOPA argued that keeping risks insurable requires earlier risk identification, broader risk sharing, and responsible transformation.
• The speech introduces no binding requirements.
• It does signal supervisory focus on private credit and funded reinsurance, natural catastrophe protection gaps, AI and ICT concentration risk, value for money, and a possible shift toward principles- and outcomes-based regulation.
• Compliance teams should treat it as a forward-looking indicator of supervisory expectations.

Deep Dive

The speech is not a rulemaking and sets no new legal obligations or deadlines. It does show where EIOPA is likely to direct supervisory attention, and compliance teams can use it to prioritize readiness. The speaker framed the "insurability frontier" around three themes: anticipating connected risk, keeping risks insurable, and shaping responsible transformation. Existing frameworks were cited as foundations, including the Insurance Recovery and Resolution Directive, Solvency II, DORA, and the AI Act. The message was to prioritize implementation and coordination of these frameworks over new layers of rules.

On financial risk, the most concrete signals concern private credit and funded or asset-intensive reinsurance. European insurers held more than EUR 500 Billion in private credit at the end of 2025, about 5 percent of total assets. EIOPA stressed opacity, leverage, concentration, and valuation uncertainty. It expects insurers to understand each investment's structure, valuation, concentration, and liquidity profile, and to show that it fits their liabilities and risk appetite. For reinsurance, the principle is that capital optimization must reflect a real and fair transfer of risk. Supervisors want visibility into economic substance, asset location and quality, counterparty concentration, and recoverability under stress. Cross-border exposures will draw a more coordinated approach under EIOPA's Strategy Towards 2030, which emphasizes "supervisory unity." Geopolitical fragmentation is now treated as a baseline condition, not a remote scenario, so stress testing and scenario analysis should reflect that.

On climate and consumer matters, insurance has covered only around one quarter of natural catastrophe losses in Europe. EIOPA is promoting its protection gap dashboard, its Catastrophe Data Hub, a proposed PROTECT tool, and a possible European Observatory on Insurability that would monitor prices, deductibles, exclusions, and availability. It is also assessing whether Solvency II could better reflect proven adaptation measures, while preserving risk sensitivity and proportionality. A European risk-sharing mechanism, with a natural catastrophe insurance pool and a loan-based backstop, was proposed by EIOPA and European Stability Mechanism staff. Adoption remains a political decision for Member States. On AI, EIOPA's survey of nearly 350 insurers in 25 countries found 65 percent already use generative AI and another 23 percent plan to within three years. EIOPA flagged correlated model errors, common bias, vendor lock-in, and cyber risk from concentrated reliance on shared models and providers. Value for money, meaning fair pricing, meaningful coverage, clarity, and reliable claims support, was presented as the basis of trust.

Recommended actions: - Review private credit and funded reinsurance governance, including look-through analysis, valuation controls, concentration limits, recapture planning, and counterparty and asset-location monitoring. - Incorporate geopolitical and cross-cutting transmission channels (market, inflation, supply chain, cyber) into ORSA and stress testing. - Align AI governance with the AI Act and DORA, including third-party and concentration risk, testing, and incident reporting. - Assess product governance and value-for-money evidence, particularly for AI-driven pricing and underwriting. - Evaluate how prevention incentives and adaptation measures are reflected in underwriting and pricing. - Monitor EIOPA's work on Solvency II adaptation treatment, the proposed observatory, and the principles-based regulation discussion.

Overall impact is moderate and anticipatory. The shift toward principles- and outcomes-based supervision would give supervisors more discretion and hold firms more accountable for outcomes, so firms should be ready to demonstrate their reasoning and evidence rather than rely on checklist compliance.

Source: European Insurance and Occupational Pensions Authority