In its role as Belgium’s macroprudential authority since 2014, the National Bank of Belgium (NBB) continues to closely monitor the financial system, aiming to safeguard its stability through proactive risk detection and targeted regulatory measures. Despite the backdrop of severe financial market turbulence and heightened uncertainty in 2024, the Belgian financial sector demonstrated resilience, supported by strong solvency and liquidity buffers. Against this uncertain environment, the NBB maintained its macroprudential policy stance, emphasizing on the importance of a robust regulatory framework.
Particular attention will be given below to the developments and considerations concerning the Belgian insurance sector in 2024, highlighting its recent performance, emerging risks, and the supervisory priorities identified by the NBB in this area.
Read the full Financial Stability Report here.
Balance Sheet Overview
Total assets decreased to €348 billion (from €377 billion in 2021) due to higher interest rates. Excess assets over liabilities—key to regulatory own funds—stood at €39.2 billion.
Technical Provisions
- Unit-linked (Class 23): €55.7 billion; policyholders bear investment risk
- Non-unit-linked: €210.7 billion, mainly life insurance (77%), with public and corporate bonds, loans, and mortgages forming the majority of backing assets.
Life Insurance with Guaranteed Returns
These remain dominant in Belgium. Insurers faced asset-liability management challenges in the low-rate era, reducing their duration gap and adjusting their portfolios to preserve profitability. The average guaranteed return declined from 2.8% in 2015 to 1.8% by end-2023.
Investment Trends
- Decline in public sector bonds (from 50% in 2017 to 40% in 2024)
- Growth in riskier assets like mortgages, commercial real estate (CRE), and private equity
- Corporate bonds remained stable (~20%), but about 30% were BBB-rated.
- CRE exposure rose to 10% (from 8% in 2016), with a cumulative 30% value loss since 2021.
Capital and Liquidity
The SCR ratio was 201% (down from 216% in 2023), indicating strong capital buffers. A stress test showed the ratio could drop to 97% in a severe scenario, but reactive measures could lift it to 138%. Liquidity ratios remained robust (~250%), despite a decline due to increased illiquid asset holdings.
Natural Disaster Coverage Risk
Gaps in the statutory framework for disaster cost allocation create uncertainty. This could reduce reinsurance capacity and lead to unaffordable premiums, particularly for vulnerable groups. Finalising a more robust public-private partnership is critical.