This revision paves the way towards reducing undue costs and barriers that still apply to insurers seeking to invest equity directly or indirectly into long-term projects.
The European Commission published today its proposal to revise the Solvency Directive, which sets common rules for the risk management and supervision of insurance companies
in the European Union. This revision paves the way towards reducing
undue costs and barriers that still apply to insurers seeking to invest
equity directly or indirectly into long-term projects.
Over the past 5 years, insurance undertakings invested €45 billion into private equity,
making up around 9% of the overall capital raised by these funds.
Insurers, which are long-term investors by nature, supported thousands
of businesses across the continent by committing capital into private
equity funds. Yet, insurers’ investment in equities remains extremely
low – with an asset allocation in equity funds of only 3,3% (0,6% in
private equity) according to the most recent EIOPA statistics.
Changes to the criteria defining the long-term equities category,
which will be part of the announced review of the Delegated Regulation,
offer a perfect opportunity to better acknowledge the way insurers hold
long-term assets and to incentivise them to set up long-term portfolios.
Seizing the high potential for improvement could ultimately drive the
insurers’ ability to support businesses by investing into venture and private equity funds.
As the representative of the European private equity community, including both fund managers and investors into these funds, Invest Europe is looking forward to working with the co-legislators
to ensure insurance undertakings are in a position to commit some of
their capital to long-term equity funds while maintaining the high
prudential standards of the framework.
Invest Europe
© Invest Europe (formerly EVCA)
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