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Reviving long-term financing remains one of the most pressing policy issues in Europe. As the largest European institutional investor, holding €8.5tn of assets under management at the end of 2013, insurers are well positioned to support long-term financing to the real economy, as their long-term liabilities enable them to hold long-term assets.
The availability of assets is crucial to the significant investment role that insurers play in the economy. As noted in the paper, high-quality securitisations may be useful to insurers in generating appropriate returns for policyholders and meeting diversification and duration needs.
The consultation raises a number of valuable questions which deserve careful consideration. While noting that an approach to define qualifying securitisation is already part of the Solvency II framework, the paper also raises a question on whether this approach warrants changes to better reflect the risk-sensitiveness of the framework.
Insurance Europe largely supports the current Solvency II approach, but believes that some eligibility criteria and calibration levels should be reviewed to appropriately recognise the risk profile of securitisations.
In addition, Insurance Europe supports the encouragement of standardisation and transparency in the securitisations market, as a way to help foster the attractiveness of securitisation to private investors.
Insurance Europe believes that this consultation is timely and follow-up policy responses are needed as soon as possible.