AlphaReal: European life insurers positive about new regulation

AlphaReal: European life insurers positive about new regulation

October 11, 2023

Insurance companies
Positief positive thumbs-up (Leopold Boettcher, Pixabay)

Reform of legislation will support greater allocation to a wider range of secure income assets.

European life insurers are optimistic that changes to regulation will make it easier to invest in secure income assets and private markets. That concludes AlphaReal today from a survey of European life insurance companies that collectively oversee €2.73 trillion in assets. ‘66% of respondents believe that reform of legislation, including the Solvency II Directive, supports greater allocation to a wider range of secure income assets. 33% of life insurers believe the reforms will have no impact on allocation to secure income assets, while just 1% say reforms are not supportive.’

‘In terms of how their allocations to secure income assets are classified within their organisations, 48% of survey respondents say it is classified as alternatives, compared to 44% who say it is real estate and 8% who say it is seen as alternative credit.’

Focus on Europe

When it comes to the rating categories within which they will invest in secure income assets, 66% selected AA instruments and only 7% BB.  ‘Nearly all (98%) European life insurers say they have been successful in integrating secure income assets within a matching portfolio.’

‘When asked about the impact of regulatory reforms on European life insurers’ investments in private markets, 88% say they will be supportive of allocations, while 12% say they will have no bearing.’

‘Life insurers surveyed typically focus on Europe for their private market allocation. Almost half (47%) invest Europe-wide with a home country bias, 33% invest Europe-wide, 17% invest solely in their home country, and 3% have a global allocation.’

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