The materiality of digitalisation and cyber risks for IORPs is increasing, according to the European Insurance and Occupational Pensions Authority’s (EIOPA) latest Risk Dashboard for IORPs.

In its July 2026 edition of the dashboard, the authority said digitalisation and cyber risks are currently rated as a medium level but show a “worsening outlook” over the next 12 months, reflecting persistent geopolitical uncertainty and growing systemic cyber risks associated with frontier artificial intelligence (AI) models.

Currently, all risks (macro, credit, liquidity, reserve and funding, concentration, ESG-related, digitalisation and cyber risks) are rated at a medium level, except for market and asset return risks, which remain rated at a high level despite the easing of equity and bond market volatility at the end of June.

“Geopolitical developments in mid-July contributed to renewed volatility, particularly in commodity markets. Looking ahead, the 12-month risk outlook is worsening amid concerns over a potential broader market correction, elevated valuations and a possible reassessment of risk premia linked to renewed geopolitical tensions,” EIOPA stated.

Macro risks are another area with a worsening outlook, driven by weaker GDP prospects and rising inflation at the end of June.

Over the next 12 months, the global macroeconomic outlook remains shaped by elevated uncertainty amid persistent geopolitical frictions, potentially adding to inflationary pressures.

Despite adverse macroeconomic and geopolitical developments, EIOPA said Europe’s IORP sector remains resilient, supported by the robust financial position of defined benefit (DB) schemes and positive portfolio performance.

Financial markets have remained resilient despite the challenging geopolitical environment, with sovereign and corporate bond spreads largely contained, although they widened slightly in mid-July.

However, EIOPA warned that debt financing costs and private credit quality should be closely monitored, as higher borrowing costs could increase default risk for highly leveraged entities, while public credit spreads may not fully capture emerging risks in private credit markets.

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