Solvency II – Feature


It is no secret that the government sees institutional cash as key to filling the gaping funding hole in its infrastructure ambitions. While pension schemes have received widespread coverage on the role they could play here, insurance investors have received less attention. This is partly due to the stringent rules of Solvency II, which make it harder for insurers to invest in illiquid assets, such as infrastructure. But the government plans to tackle this by reforming Solvency II to free up insurance investment into infrastructure as part of its


plan to unleash a “Brexit bonus”. But how successful are those changes going to be and what pitfalls do they need to consider?


Keeping up with the Schultz’s With some £1.9trn in assets under management, insurers are the UK’s second largest institutional market and one of the wealthi- est insurance markets in the world. But due to Solvency II, they have to be relatively more conservative by building fixed income-heavy portfolios.


Issue 113 | May 2022 | portfolio institutional | 55


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