Higher inflation, soaring energy prices and the ongoing conflict in the Middle East pushed asset and market risk into ‘high’ on the European Insurance and Occupational Pensions Authority's (EIOPA) April dashboard for IORPs.

The dashboard ranked asset and market risk at a high level of risk, shown by the colour orange.

EIOPA cited inflation, high energy prices and the Middle East conflict as key elements affecting the macroeconomic environment, and added that growing doubts around the abilities of artificial intelligence (AI) were “adding to sensitivities”.

The authority said that financial markets were being tested by “geopolitical uncertainty” and that bond spreads had widened and equity volatility had spiked towards the end of March, leading to potential vulnerability due to high valuations.

The dashboard report stated: “Looking ahead, the risk outlook for the next 12 months is increasing amid persistent geopolitical instability.”

The ‘assets and markets’ category was the only one evaluated that was highlighted as ‘high risk’ in the April dashboard.

Other risk categories (macro, credit, liquidity, concentration, ESG-related and digitalisation and cyber) were all rated ‘yellow’ or medium risk.

Conversely, defined benefit (DB) reserve and funding risks were the only elements rated ‘green’ or low risk, as reserves remain strong.

In its report on the dashboard, EIOPA said: “Reserve and funding risks for defined benefit (DB) schemes remain at a low level, driven by the further strengthening of the financial position of IORPs in the fourth quarter of 2025.

"This improvement reflects the combined effect of strong investment returns, driven by higher equity prices, and rising interest rates, which reduced the value of pension liabilities.”

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