Insurance EuropeInsurance Europe
European insurance investments up 3.2% to €8.5 trillion in 2013, but future investment under threat

Insurers’ investments in the European economy continued to grow during 2013. Concerns remain, however, about how the Solvency II directive will affect their ability to continue as Europe’s largest long-term stable investors, according to Insurance Europe, the European insurance and reinsurance federation.

As of 31 December 2013, the European insurance industry had over €8.5 trillion of assets under management, representing a 3.2% growth at constant exchange rates compared with 2012, according to the federation’s annual Key Facts booklet, that was published today.

Michaela Koller, director general of Insurance Europe, commented: “Insurers make a huge contribution to the European economy by promoting growth and stability through long-term investments equal to around 60% of Europe’s GDP. This role is, however, under threat. While the industry welcomes the move to a risk-based regulatory regime and recognises that the final version of Solvency II was improved to avoid a huge negative impact on long-term investments, aspects of the directive and how it is implemented will still require insurers to hold inappropriately high amounts of capital against their long-term investments.

“This will make it more expensive for insurers to invest in long-term government and corporate bonds, as well as growth-stimulating activities, such as infrastructure projects. This could discourage insurers from making these vital investments, which would have a significantly negative effect on the European economy at a time when boosting growth is an overall policy objective.”

Published 1 September 2014