Insurance Europe has submitted a detailed consultation response to the International Association of Insurance Supervisors (IAIS) concerning significant structural developments in the life insurance sector. The submission addresses the growing use of alternative assets and asset-intensive reinsurance (AIR) arrangements by life insurers, and their potential impact on regulation and risk management.
Market Context and Role of Life Insurers
The industry body highlighted that life insurers remain central to providing long-term savings and retirement products across Europe. However, this role has been challenged by the Solvency II regulatory framework and an extended period of low interest rates, which have constrained insurers’ capacity to offer affordable products to policyholders.
Investment Strategies Adapt to Current Market Conditions
In response to the challenging environment, life insurers have increased their investments in alternative assets and expanded the use of AIR transactions. Insurance Europe stated these strategies help diversify investment portfolios and potentially enhance long-term returns for policyholders.
The association emphasized that AIR transactions undergo thorough due diligence and risk assessment. They consider AIR as a strategic tool to better manage long-term liabilities and optimize capital efficiency.
Risk Management Experience and Regulatory Framework
The consultation underscores the insurance industry’s expertise in handling complex risks, including valuation challenges and data limitations identified in the IAIS draft. Insurance Europe affirmed that the existing Insurance Core Principles (ICPs) provide a sufficient regulatory foundation to oversee alternative assets and AIR arrangements.
While the association does not see a need for major revisions to current standards, it supports clarifications—such as a clearer definition of AIR—to improve regulatory consistency.
Call for Early and Continued Stakeholder Engagement
Insurance Europe urges the IAIS to engage with industry stakeholders early in the policy-making process. The association recommends the use of technical workshops and expert dialogues to ensure future regulations align with practical market conditions and operational realities.
Broader Review Reflects Industry’s Evolving View
This consultation is part of the IAIS’s wider review of global insurance industry structural changes. Insurance Europe’s response reflects the sector’s position that while investment practices are evolving, existing risk management frameworks and regulations remain relevant and effective in addressing current and future challenges.
Related topics：
