Insurance Europe has responded to a European Insurance and Occupational Pensions Authority (EIOPA) consultation on its advice to the European Commission on the identification and recalibration of infrastructure risk categories in Solvency II.
In its response, Insurance Europe said that the EIOPA advice does not go far enough in order to remove impediments in infrastructure investments. It also said that the set of identification criteria put forward in the advice is too restrictive and causes significant burden for insurers that need to verify compliance with the criteria.
Insurance Europe pointed out that EIOPA’s proposal still overstates the risk of investments in both infrastructure equity and debt, and fails to allow for any diversification benefit that these investments bring to an insurer’s investment portfolio.
It also said that EIOPA’s advice relies too much on the availability of ratings from authorized agencies, and that insurers should be allowed to use other means for the credit assessment of infrastructure, eg internal ratings.