Insurance in a New Paradigm: When Managing Risk Is No Longer Enough
The insurance industry is going through a defining moment. The emergence of new risks, from climate change to cybersecurity, together with the rise of emerging technologies and an increasingly demanding regulatory framework, is transforming the way enterprises protect, invest and manage their capital. Cristina Querejeta, Global Sector Head of Insurance Coverage at BBVA CIB, outlines the key drivers behind this evolution.
After a decade marked by low interest rates, insurers are entering a new phase from a position of strength. However, the shift in the monetary cycle is only one part of a broader transformation. Climate-related risks, new protection needs, technological acceleration and an increasingly demanding regulatory environment are reshaping both business models and resource allocation.
“The insurance sector is no longer viewed as a purely transactional business and is becoming a strategic component of the new global financial architecture,” says Cristina Querejeta, Global Sector Head of Insurance Coverage at BBVA CIB. “We are at a turning point: insurers are redefining both their business models and their capital structures.”
One of the most profound changes affects the very nature of insurance activity. Traditionally focused on compensating losses after a claim has occurred, insurance is evolving towards models that place greater emphasis on prevention. “The ability to anticipate risks is becoming just as valuable as the ability to transfer them. Technology, data and the use of AI allow us to support clients before a loss occurs, and that fundamentally changes the sector’s value proposition,” says Querejeta.
The New Financial Equation of Insurance
The redefinition of the business is having a direct impact on balance sheets. The efficient use of capital has become a strategic priority for institutions seeking to combine profitability, resilience and growth in a more demanding environment.
“What we are seeing is a structural transformation of the insurance model,” explains Querejeta. “This changes the nature of our conversations with clients: we are no longer talking only about financing, but also about balance sheet optimisation, financial resource optimisation and long-term competitive positioning.”
Cristina Querejeta, Global Sector Head of Insurance Coverage at BBVA CIB
Investment strategies are evolving to improve asset-liability management and capture new return opportunities. While fixed income has regained attractiveness, private markets and alternative assets continue to gain prominence. At the same time, the review of Solvency II and new requirements related to operational resilience and technology governance are increasingly influencing resource allocation and the design of corporate transactions. As a result, the sector’s financial activity is increasingly focused on solutions that strengthen solvency, optimise balance sheets and improve capital efficiency.
A New Role for Banking
In this context, partnerships are becoming increasingly important. Banks, insurers, asset managers and technology companies are being called upon to collaborate in addressing the market’s new challenges. “As the sector evolves, so does the role of banking. Our goal is to support insurers not only with their financing needs, but also with their long-term strategic decisions,” explains Querejeta.
"We are at a turning point: insurers are redefining both their business models and their capital structures"
BBVA CIB supports insurers in challenges ranging from capital optimisation and market access to the structuring of complex transactions and the origination of private assets. “When an insurer approaches us to optimise its balance sheet, raise alternative capital or structure a reinsurance transaction, we do not start from scratch,” she says.
This capability has been reflected in recent transactions such as the Funding Agreement Backed Loan (FABL) with Delaware Life Insurance Company, the first sidecar facility structured together with Global Atlantic to support reinsurance and pension risk transfer transactions, the issuance of guarantees in the case of Doral Renewables, and Bupa’s £400 million Tier 2 bond issuance.
Beyond specific transactions, these initiatives reflect the evolution of an industry that no longer competes solely on its ability to assume risk. In a landscape where regulation, innovation and financial resources converge, the institutions that lead the sector will be those capable of turning uncertainty into opportunity. The challenge is no longer simply to insure tomorrow, but to play an active role in making it possible.