Funding the Future

Insurers' role as institutional investors.

Our latest study, published with Insurance Europe, confirms that insurers are the largest institutional investors in Europe, with €8.5trn of assets under management in 2012. With new banking rules forcing banks to reduce levels of maturity mismatching and liquidity risk that were common pre-crisis, and with funds required to stimulate economic growth, Europe faces a total funding gap of between €4trn and €5trn between 2012 and 2016.

Insurers’ investment strategies uniquely position them to play a stabilizing role in the economy and provide an ideal source of long-term funding. However, insurers are concerned about the various policy trends that could reduce the flow of premiums available and create disincentives to long-term investing.

Our report, Funding the Future aims to explain why this is so. We describe what drives insurers’ investment decisions and the distinctive characteristics that make insurers natural, low-risk and long-term investors. Then we explain the benefits this provides to policyholders and the broader economy. Finally, we identify the relevant policy developments and how they may affect those benefits.

Funding the Future