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.
