Banks May Be Key For Insurers To Fulfill EU Investment Needs

LONDON, Nov 16 (Reuters) – Efforts to get insurance providers to connect Europe’s investment distance by support riskier assets could be undermined if banking institutions are unwilling to talk about crucial credit data with them, a European Union insurance regulator said. EU insurance capital guidelines known as Solvency II are being analyzed to make it easier for insurers to place their financial firepower to work in choice investments, such as infrastructure, unlisted equity, or loans. These attract insurers struggling during an era of low interest rates as they typically offer higher returns, but are typically illiquid or less liquid, without deep market, making them difficult to price thus.

This supposed much could hinge on whether insurance providers can form “partnerships” with banking institutions to touch the credit score data necessary for assessing dangers, Jean Hilgers, a European Insurance and Occupational Pensions Authority (EIOPA) table member, said. But it is unclear to what degree banks will talk about delicate data from their inner models commercially, Hilgers, who is also a director at the National Bank or investment company of Belgium, said.

Hilgers informed Reuters on Thursday. There are also no benchmarks for measuring profits from such investments, and how companies manage dangers should be “completely revisited”, contacting for specialist staff, he said. Insurers would have to have clear “operational limitations” for risk, with the plank people and older managers fully understanding the complexity of some investments. Lewis Webber, head of insurance data analytics at the Bank of England’s Prudential Regulation Authority, told the same conference that it was a “good thing” for the economy that someone holds “illiquid, unreadable cashflow producing things”. EIOPA will make suggestions on changes in February but it will be up to the EU’s European Commission to decide whether to put them into draft legislation.

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