As financial markets continue to face periodic shocks, UK regulators are increasing their focus on liquidity risk management, especially among larger insurers with complex portfolios.
In the consultation paper, CP19/24, the Prudential Regulation Authority (PRA) set out new proposals to improve the quality and frequency of liquidity data collected from insurers. The goal is clear: better reporting, earlier intervention, and stronger resilience.
But what does this mean in practice for insurers, and how can firms prepare ahead of the implementation deadline?
The PRA’s proposals are shaped by hard lessons from recent events—including the COVID-19 market turbulence and the 2022 Liability Driven Investment (LDI) crisis.
These episodes highlighted:
As a result, the PRA now aims to close those gaps by introducing new, standardised templates to improve the regulator’s ability to assess systemic liquidity risks, particularly during periods of market stress.
The proposals primarily target larger, more complex firms, particularly those with significant exposure to financial market activity.
You’re likely to be in scope if you meet all the following conditions:
While the proposals don’t currently apply to smaller insurers, the PRA has signalled it may expand scope in future based on market developments.
Insurers in scope will be required to submit new liquidity templates covering:
Importantly, the PRA is reserving the right to require daily reporting during periods of financial stress, mirroring expectations already in place for banks and asset managers.
Firms that may fall into scope should begin planning now, long before the end-of-year deadline.
Here are three key steps to take:
This isn’t just a regulatory exercise; it’s also an opportunity to strengthen your firm’s internal view of liquidity risk and operational preparedness.
The PRA’s consultation closed on 31 March 2025, with implementation expected by 31 December 2025. Insurers need to assess their systems, engage with internal stakeholders, and prepare for compliance.
Liquidity risk is no longer a banking-only issue. As the insurance landscape becomes more financially complex, the PRA is making it clear that robust, transparent liquidity risk reporting is essential.
Firms will not only be required to comply with CP19/24, they’ll also build stronger risk awareness and resilience across their organisation.
At Brighter Consultancy, we work closely with insurers to operationalise regulatory change with clarity and confidence. If you’re navigating Solvency II, CP19/24, or broader liquidity risk transformation, we’re here to help.