Insurance Europe has responded to a consultation by the International Association of Insurance Supervisors (IAIS) which focusses on a draft Issues Paper on structural shifts in the life insurance sector, including, alternative assets and asset-intensive reinsurance (AIR).
In its response, Insurance Europe's notes that:
- The role of life insurers & challenges: Life insurers are key providers of long-term savings and retirement products in Europe. Their ability to offer affordable products has been impacted by Solvency II and a prolonged period of ultra-low interest rates.
- Investment strategies & AIR: Life insurers manage long-term liabilities through investments in alternative assets and AIR enhancing portfolio diversification, returns, and long-term policy value for consumers.
- Risk management expertise: Insurers are experienced in managing complex risks, including those raised in the paper (e.g., valuation uncertainty, data limitations). AIR transactions are B2B agreements among skilled professionals, with due diligence and financial strength assessments in place.
- Regulatory viewpoint: Insurance Europe finds existing Insurance Core Principles (ICPs) sufficient to manage alternative assets and AIR-related supervisory concerns and sees no need for changes, though supports targeted clarifications and a more precise definition of AIR.
- Call for early engagement: Insurance Europe urges the IAIS to involve trade associations early in regulatory processes via technical workshops and expert dialogues to ensure practical, market-aligned outcomes.