At a glance: PRA’s 2026 insurance supervision priorities

On 15 January 2026, the Prudential Regulation Authority (PRA) published its 2026 priorities which reflect continuation of key supervisory themes from 2025, shaped by persistent market pressures, implementation of Solvency UK reforms, and rising geopolitical and macro financial risks.

The key focus remains on its primary objective of maintaining policyholder protection, whilst supporting its secondary objectives of growth and innovation.

Here’s our snapshot of what insurers need to know across life, general and cross sector themes.

Life insurance

There’s continued strong demand for pension saving, de-risking, and long-term investment. PRA remains open to new capital and ownership structures for life insurers.

Key focus areas include

• BPA market: Competitive pressures risk weakening pricing discipline. Expect robust internal risk management frameworks and controls.
• Funded Re: Potential explicit regulations to manage associated risks.
• Investment Risk: Adapting existing risk management frameworks to reflect changing and more complex investment strategies, especially counterparty and liquidity risks.

General insurance

Softening underwriting cycle places challenges for general insurers, particularly on pricing, T&Cs, and reserving.

Insurers expected to focus on:

• Maintaining underwriting discipline, & adequate pricing and reserving.
• Ensuring Solvency Capital Requirements (SCRs) are not materially understated, driven by optimistic views of future underwriting performance.
• Strengthening exposure and portfolio risk management, particularly in volatile lines. Raise data quality and exposure management standards.
• Stronger oversight where delegated authority underwriting is used.

PRA confirms DyGIST exercise in May 2026.

Governance, legal entity oversight, and boards’ role

Across all sectors, the PRA places renewed emphasis on:

• Strong, independent governance at the legal entity level.
• Effective conflicts of interest management, especially within complex group structures.
• Board accountability for ensuring that governance arrangements keep pace with evolving business models.

Boards are expected to provide credible challenge and demonstrate clear ownership of prudential risk outcomes.

Operational resilience

Operational resilience remains a crosscutting priority.

The PRA expects firms to:

• Move beyond mapping exercises to improved operational resilience testing.
• Embed operational resilience into day-to-day risk culture and decision making.
• Ensure robust capabilities to detect, respond, and recover quickly and effectively from Cyber risks.

Solvency UK, solvent exit, and AI

Following the implementation of Solvency UK reforms, the PRA’s 2026 focus is on firms delivering the intended benefits in practice. This includes:

• Effective use of the Matching Adjustment Investment Accelerator introduced at the end of 2025.
• Preparation for the June 2026 deadline for in scope firms to complete a Solvent Exit Analysis.

PRA expects insurers to use AI and advanced analytics responsibly by:

• Identifying and managing model, data, and operational risks
• Ensuring innovation is aligned with safety, soundness, and policyholder protection

Get in touch

Send us an email if you want to discuss how these regulatory changes will impact your organisation – info@4-most.co.uk.