While the Solvency II regulatory regime, which came into force in the EU in January 2016, should in theory give greater freedom to insurers to invest their assets optimally for policyholders, insurers are concerned that the risk-based measures do not yet properly capture the long-term nature of their investments, and so can exaggerate risks and capital requirements.
This makes it needlessly expensive for insurers to invest in the right way on behalf of their customers and can also undermine their ability to provide long-term investment and stability in the European economy.
Michaela Koller, director general of Insurance Europe, commented: “Solvency II is already very conservative. There have recently been calls to make it even more so, through changes to the ultimate forward rate. This would seriously limit insurers’ ability to maintain their role as Europe’s largest long-term institutional investors. Instead, policymakers should take time to assess how well Solvency II is working, and to ensure that its capital requirements actually match the risks insurers face, so that they can continue to make significant long-term investments in our economy.”
The investment figures are among a range of statistics published in the federation’s annual Key Facts booklet. The publication also reveals that the volume of claims and benefits paid out by Europe’s insurers in 2015 increased by 2% in comparison to the previous year to €976bn. Life benefits increased by 1.7% in 2015 to €649bn, non-life claims paid increased by 2.3% to €222bn and health claims paid grew 4.3% to reach €101bn.
Koller added: “These figures underline the unique protection that Europe’s insurers provide to our society and economy.”
The 2015 data also revealed that:
• An average of €2 010 per capita was spent on insurance in Europe, up from €1 993 in 2014. Of the per capita spent in 2015, €1 223 was on life insurance, €574 on non-life and €207 on health insurance.
• Insurance penetration (gross written premiums as a percentage of GDP) decreased year-on-year by 0.2 percentage points to 7.4%, ranging from 0.9% in Latvia to 11.4% in Finland.
• Total European direct gross written premiums increased by 1.3% between 2014 and 2015, to reach €1 200bn. Life premiums grew 1.2% to €730bn, non-life premiums grew by 1.1% to €343bn and health premiums grew 1.5% to €124bn.
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