European policymakers must act to ensure insurers can fully contribute towards a sustainable Europe

Thursday, 23 May 2019

European policymakers must act to ensure insurers can fully contribute towards a sustainable Europe




EU insurers have already committed to invest an estimated €50bn in sustainable investments between 2018 and 2020
To allow European insurers to maximise their contribution towards a sustainable Europe, policymakers must: take action to ensure prudential capital requirements reflect the real risks insurers face; provide a clear taxonomy that avoids greenwashing; and ensure conduct rules give consumers real choice over environmental, social and governance (ESG) and non-ESG investment products.  
Beyond regulation, demand for sustainable and long-term investment is significantly higher than the supply of appropriate assets, as shown by recent green energy/infrastructure projects that were oversubscribed. Action is also therefore needed to achieve the creation of suitable, sustainable investment opportunities.
This was the message from Insurance Europe’s president, Andreas Brandstetter, CEO and chairman of UNIQA Insurance Group, speaking at the 11th International Insurance Conference that takes place today in Bucharest.
Brandstetter said that insurers can contribute towards a more sustainable Europe in multiple ways: through stewardship, investment and divestment strategies, and co-investment with governments in key green infrastructure programmes.
“Insurance Europe estimates that European insurers have committed to invest well over €50bn in sustainable investments between 2018 and 2020,” he said. “Through the combined efforts of all stakeholders, including industry, civil society and governments, we can make Europe sustainable for generations to come.”
Brandstetter also called on policymakers to help insurers refine the protection they offer against cyber-attacks, which are increasing in both frequency and severity. One of the main barriers to the development of the cyber insurance market is the lack of data on cyber risks. However, recent pieces of legislation that require companies to report cyber incidents to relevant authorities (eg, GDPR and the NIS Directive) have created a wealth of useful data.
“Policymakers could help insurers to better protect society by providing them with access to anonymised information about cyber-attacks,” he said.
Brandstetter also highlighted closing the pension savings gap as a key priority. This is another challenge where insurers can play a key role but requires EU policymakers to improve Solvency II, so that capital requirements reflect the real risks insurers face. This will enable them to offer the best possible returns to customers with long-term insurance savings products and, in turn, could help to address the growing pension savings gap by encouraging more people to save in private pension products.
“Pension provision is and will remain under the remit of national governments. However, their solvency regulation falls under the remit of EU co-legislators, so it is encouraging to see that they recognise the potential of personal pensions as a way to stimulate long-term savings,” he said.

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