“Since insurers hold long term liabilities, they are natural investors in infrastructure. In order to continue encouraging this investment, the NIC should consider broadening the types of financing structures to interest a wide range of investors. Given the nation’s rising flood threat, we believe the NIC should consider the viability of a Government flood defence investment bond that would provide a suitable monetised return for private investment in flood defence infrastructure.”
ABI response: executive summary
The creation of the commission is an important development which could help unlock significant economic potential benefits such as encouraging growth and attracting investments across the UK.
We are supportive of the commission’s focus on infrastructures and the long-term outlook it adopted with regards planning. We believe that this could encourage further investments in infrastructure and increase the pipeline of projects. As the largest institutional investors managing investments of £1.8 trillion in the UK, insurers will have a major role to play in helping to realise these objectives. We believe that the establishment of the commission could help to establish long-term outlook and stability in this sector.
As holders of long-term liabilities, insurers are natural investors in infrastructure investments due to the long-term nature of such investments and the predictability of cashflows they offer. In order to continue encouraging insurers’ investments into infrastructure, we would encourage the commission to consider:
Creating a stable investment environment for insurers to invest in by avoiding interference in existing projects and contractual arrangements or future projects which are/will be underway to ensure stability.
Improving and broadening the types of financing structures for infrastructure projects to ensure that these projects can be accessed by a wide range of interested investors.
Having a taxation framework which facilitates long-term investment in public and private infrastructure.
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