The Prudential Regulation Authority’s (PRA) General Insurance Stress Test (GIST) has evolved significantly since its introduction in 2019. What began as a structured exercise in assessing balance-sheet resilience has developed into a broader examination of how firms manage data, governance and real-time exposure. Since then, subsequent exercises, most notably the Insurance Stress Test 2022 (IST 2022,) have built on the lessons learned by both insurers and supervisors.
Now, as the sector prepares for DyGIST 2026 (Dynamic General Insurance Stress Test), insurers have the opportunity to reflect on what earlier versions revealed about industry practice, not just for compliance but for credible readiness.
GIST 2019 asked firms to model a combination of macroeconomic shocks, natural catastrophe events and cyber losses to expose how uneven their scenario capabilities were. By 2022, the PRA had expanded the brief, asking firms to be more transparent around assumptions, management actions and data lineage. Inflation and liquidity risks, although not explicitly stressed, were identified as priorities for future work. The shift from a single-event stress test to multiple simultaneous shocks was established.
Brighter’s view: Scenario design has become increasingly sophisticated with each iteration, and DyGIST will continue this trend. Firms should expect a broader mix of stresses, including economic, liquidity and operational components, that require consistent modelling frameworks and cross-functional collaboration. Insurance firms that assume a narrow stress range will be under-prepared, and their challenge will be to maintain clarity in their methodologies.
The 2022 feedback highlighted recurring weaknesses in data quality, governance and model documentation. Many firms still relied on manual processes to combine exposure, claims and investment data, potentially introducing latency and error risk. An academic review of UK stress-testing practices also highlighted that data infrastructure continued to be a limiting factor for many insurers.
Brighter’s view: DyGISYT will test firms’ ability to produce data quickly and coherently. Automation, reconciliation and clear model documentation are no longer optional. The regulator will be looking at how insurers source and verify their inputs as much as the outputs themselves. Insurers that treat data as a compliance afterthought rather than as a resilience asset will find this aspect more difficult.
The PRA’s observations from IST 2022 revealed inconsistencies in board and senior management engagement. Some firms ensured formal, full board approval of their submissions while others involved senior management only after the results were submitted.
Brighter’s view: In this upcoming exercise, governance will be a central theme. Stress testing is no longer a technical project confined to actuarial teams, it’s a demonstration of how well leadership understands and can act on risk information. Boards are now expected to play a more visible role, understanding not just the outputs but the reasoning behind them and ensure that escalation triggers, decision logs and management-action frameworks are clear and rehearsed.
Previously, stress testing was primarily about quantifying capital strain. Since 2019, however, the PRA has emphasised that these exercises are, “to inform our view of sector risks and assist in the supervision of individual firms. For clarity, this is not a pass/fail exercise and is not designed to set capital buffers”. This means that the emphasis is now on how insurers respond in real time, what management actions need to be taken, how liquidity is sourced and how firms communicate under stress.
Brighter’s view: The challenge for insurers now is to demonstrate how they would act in the face of stresses. Firms need to show that their management actions are specific, evidence-based, operationally feasible and timely. Simply listing potential measures without showing how they would be triggered or executed is no longer sufficient.
As we turn to the upcoming DyGIST 2026, several important developments distinguish it from previous incarnations:
Dynamic scenarios – participants will not know all the parameters in advance. Firms will receive scenario details progressively during the exercise, simulating a live crisis
Broader participation – UK branches of overseas insurers will be included for the first time
Focus on liquidity – the test will examine both solvency and liquidity, reflecting lessons from recent market volatility
More regular cycles – the PRA intends to run the exercise every two years from 2026 onwards, establishing a regular testing culture rather than running ad-hoc reviews.
Brighter’s view – These shifts signal a move to a more realistic philosophy. Insurers will be judged on how they adapt as information changes. The ability to mobilise information and decision-making quickly will distinguish firms that manage DyGIST most effectively.
Based on lessons from 2019 - 2022 and the structure of DyGIST, Brighter recommends five pragmatic areas on which insurers can focus:
Data readiness – ensure end-to-end traceability and the capacity to aggregate exposures across business lines and jurisdictions
Rehearse governance – involve boards early and conduct dry-runs to test escalation and sign-off procedures
Clarify management action – document realistic, time-bound actions supported by evidence and linked to triggers
Integrate liquidity – build consistent modelling between solvency and liquidity positions, including reinsurance recoveries and cash-flow stress
Rehearse dynamic scenarios – run internal simulations where assumptions shift mid-exercise to develop the responsiveness the PRA will be looking for.
If insurers internalise these lessons now, they’ll not simply meet regulatory expectations; they’ll strengthen their resilience for whatever real-world shock comes next.
The experiences from 2019 - 2022 have demonstrated that resilience is not only about modelling losses, it’s about how effectively firms interpret, govern and act on stress information. The PRA wants evidence of control, insight and adaptability.
DyGIST 2026 will test those capabilities more stringently than ever before. Firms that have invested in data quality, governance rigour and rapid decision-making will be best placed to demonstrate genuine resilience and emerge confident from DyGIST.
Do you need assistance with any aspect of your DyGIST planning? Contact Brighter Consultancy for more information about how we can help.