Norwegian life insurance companies and pension funds generally have good financial strength, although results in the first quarter of 2025 were affected by geopolitical unrest and warnings of increased tariffs, the Financial Supervisory Authority of Norway (Finanstilsynet ) has said.

The group acknowledged that the recent geopolitical unrest and international tariffs had led to a decline in the value of shares, a significant decline in returns and reduced buffer funds.

However, it argued that life insurance companies' portfolios are diversified, with about half of the investments in foreign assets, and pointed out that pension funds have achieved good returns in recent years, partly due to a weakened krone exchange rate.

The comments were made as part of the Finanstilsynet's broader financial outlook for June, which confirmed that, overall, the Norwegian economy has recovered well from the inflation and interest rate shock following Russia's invasion of Ukraine.

However, it acknowledged that geopolitical changes since are creating great uncertainty about future developments, and the risk of global financial instability has increased.

"As a small, open economy, Norway and the Norwegian financial industry are vulnerable to setbacks and unrest internationally," Finanstilsynet director, Per Mathis Kongsrud, said.

"Changes in the threat landscape make it important to reduce vulnerabilities and further develop resilience, also within cybersecurity, technological dependencies and other operational risks"

The Finanstilsynet said that there is also increasing awareness among political authorities, supervisory authorities and supranational organizations about the need to simplify financial market regulation, which has become very extensive and detailed over time.

Given this, it confirmed that both national and international efforts are being made to investigate and implement simplifications in regulations, supervisory practices and reporting, as well as to provide better guidance.

"In the opinion of the Norwegian Financial Supervisory Authority, simplifications in the regulations should be implemented so that the central objectives of the regulation are met within the framework of international standards," Kongsrud added.

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