The key areas of focus in 2023 will be:
The combination of the on-going recession and high inflation provide a very challenging economic outlook for insurers. For life insurers, the PRA has identified the potential threat of firms having increased exposure to credit and concentration risk and therefore expects life insurers to stress test their capital planning against prolonged adverse credit scenarios. For general insurers, the PRA expects the pressures of claims inflation and the uncertainty around future claims settlement costs to continue. Consequently, the PRA expects general insurers to factor general and social inflation drivers into their underlying pricing, reserving, business planning and capital modelling.