A study published by Insurance Europe (the European insurance and reinsurance federation) and Oliver Wyman confirms the European insurance industry as the largest institutional investor in Europe, with an estimated €8.5trn of assets under management as of 31 December 2012. In 2011, 64% of these assets were government or high-rated corporate bonds and 15% were equities.

The report highlights that insurers are an ideal sources of long-term funding for businesses and have a counter-cyclical and stabilising effect on financial markets and the economy.

A range of regulatory developments have the potential to create framework conditions that affect insurers’ ability to continue providing long-term funding to the economy. Concerns arise principally in three areas of policy: prudential regulation, taxation and collateral requirements for derivatives, as well as in overall macroeconomic policy.

The policy agenda affecting insurers is currently erring on the side of unnecessary caution, with potentially damaging effects for the health of the European economy. The effects that regulatory changes can have on insurers’ investment behaviour and this on the wider economy must be recognised. Insurance Ireland will engage with the necessary stakeholders to develop a framework to ensure that these key issues are addressed.

For further details see: “Funding the future: insurers role as institutional investors”, Insurance Europe and Oliver Wyman, June 2013.

 Insurance Ireland – the leading voice of insurance

Funding the future: insurers role as institutional investors

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