Infrastructure investment for insurance companies under solvency II
The draft proposal for Solvency II paints infrastructure investing with an overly broad brush and misses an opportunity to distinguish between the diverse styles of infrastructure investing that carry very different expected risk-return profiles. The simplistic approach to the entire infrastructure sector under the draft proposal makes it more difficult for European insurers to access the stable and relatively predictable long term cash flows provided by infrastructure assets at the lower end of the risk spectrum.
Thinking outside the low-yield box
In order to meet financial targets, insurers are evaluating new sources of investment income as the anemic, prolonged market recovery expands the hunt for yield across maturities, markets and asset classes. This paper discusses these issues and provides insight into what insurers should be thinking about.
Solvency II reporting: The three pillars
With the rapidly approaching implementation of Solvency II, the focus of insurance companies’ investment teams is shifting from the much talked about financial impact of the regulation to the often ignored disclosure requirements. This paper discusses the reporting challenges viewed through the lens of the chief investment officer (CIO) and investment manager.
Solvency II and Emerging Markets Debt
In this paper, we examine the relevance of investment grade emerging markets debt (EMD IG) under Solvency II. In particular we compare it to the broader asset class and to various developed market European bond indices. Our analysis shows that combinations of corporate and government EMD IG offer an attractive investment opportunity for insurers operation under the Solvency II framework.
Solvency II and Money Market Funds
In this paper, we examine the treatment of money market funds under Solvency II, based on our interpretation of the technical specifications contained within the fifth published Quantitative Impact Studies. We believe that a well diversified money market fund is likely to produce a lower capital charge under Solvency II than direct cash investments.
Infrastructure debt strategy – prepayment / refinancing risk
This insight looks at the prepayment/refinancing risks embedded within infrastructure loan contracts and discusses how these risks might be mitigated within a Matching Adjustment framework.
We would welcome the opportunity to meet with you to discuss your needs and challenges in the lead up to Solvency II. If you would like any further information, please contact us:
+44 (0)20 7777 0377
The Insurance Insider Monte Carlo Capital Roundtable
Matt Malloy, Head of Insurance North America, joins a panel of industry experts for the Insurance Insider Capital roundtable 2011.