thoughts & threads

The Dynamic General Insurance Stress Test, or DyGIST, is set to become one of the most significant regulatory exercises for UK general insurers in 2026. The PRA has confirmed that the live phase will take place in May 2026, marking a clear shift in how the regulator assesses sector resilience. This is highly relevant for boards, CEOs, CROs, and senior leaders because DyGIST moves stress testing from a technical exercise into the heart of strategic and operational planning.

Unlike traditional stress tests, which typically focus on a single hypothetical scenario and are reviewed after the fact, DyGIST will challenge insurers with a sequence of adverse events unfolding in real time. Participating firms will need to provide impact assessments, engage with supervisors, and execute management actions as each new shock occurs. This requires demonstrating how capital positions are affected, managing liquidity pressures, and making credible decisions dynamically. 

The PRA has already run preparatory workshops to support firms in readiness and logistics ahead of the live phase. The results of the exercise are expected to be published at aggregate industry level, providing insight into sector resilience without revealing individual firm performance.

For senior leaders, the implications are clear. DyGIST is not a compliance-only exercise. It is a test of risk culture, governance, data readiness, and operational decision making under pressure. Firms will need robust processes to translate stressful events into credible capital and liquidity forecasts and then use these forecasts to inform timely and effective management actions. 

Practical considerations for firms include:

• Boards and executive committees should actively oversee DyGIST readiness rather than delegating responsibility entirely to risk or actuarial teams.
• Risk and finance teams must build capabilities to assess sequences of shocks, not just one-off scenarios, ensuring loss estimates and capital impacts are accurate and actionable.
• Governance around decision making, data flows, and escalation paths should be tested to confirm the organisation can respond cohesively under time pressure.

DyGIST also signals the PRA’s broader supervisory approach. Realtime stress testing is now expected to reflect the operational reality of crises, rather than a static, theoretical exercise. The regulator is emphasising the ability of firms to manage dynamic stress effectively, highlighting the need for resilience across strategy, operations, and governance. 

For the UK general insurance sector, DyGIST is more than a regulatory milestone. It is an opportunity for firms to stress test their assumptions about capital, liquidity, and risk appetite in a realistic setting. The organisations that approach DyGIST strategically, integrating it with broader risk and operational planning, will gain practical insight into their resilience.

Key resources:
Bank of England PRA update on DyGIST commencement
PRA December 2024 DyGIST postponement announcement
Deloitte UK on DyGIST format expectations