At European level, insurers are the largest institutional investors, managing € 7.7 trillion assets at the end of 2011. Insurers’ significant role as investors is a consequence of their primary role of providing protection from risks, as well as long-term savings and retirement products. The main driver of insurers’ investment decisions is the profile of their liabilities. As most of their liabilities are long-term, investing with a long-horizon perspective becomes a natural match between insurers’ assets and their liabilities. At the same time, a range of framework conditions and policy actions can shape and impact the way in which insurers invest.
Against this background, Insurance Europe welcomes the G20 initiative and appreciates that the principles on long-term investment should be able to capture the fundamental elements of long-term financing in a sufficiently high-level, accessible and balanced way, based on sound economic principles.
General feedback on the proposed draft principles:
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Alongside encouraging long-term investments, governments should continuously monitor individual and cumulative effects of existing and under development regulations in order to identify and address any biases against long-term investment.
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However, any government intervention must be balanced against market mechanisms in a way that does not distort the functioning of the markets.
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The development of long-term savings should be promoted by governments through savings mobilisation policies, such as automatic enrolment mechanisms or other types of incentives.
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Governments should not only promote the development of long-term savings, but also create an environment that ensures trust and stability for those willing to invest long-term.
© InsuranceEurope
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