LONDON, Nov 16 (Reuters) – Efforts to get insurers to connect Europe’s investment distance by support riskier property could be undermined if banking institutions are unwilling to talk about essential credit data with them, a EU insurance regulator said. EU insurance capital rules known as Solvency II are being examined to make it easier for insurers to put their financial firepower to work in alternative investments, such as infrastructure, unlisted equity, or loans. These attract insurers struggling during a time of low rates of interest as they typically offer higher returns, but are usually liquid or less liquid, without deep market, thereby making them difficult to price.
This designed much could hinge on whether insurers can develop “partnerships” with banking institutions to touch the credit score data necessary for assessing risks, Jean Hilgers, a European Insurance and Occupational Pensions Authority (EIOPA) board member, said. But it is unclear from what level banks will discuss commercially sensitive data off their inner models, Hilgers, who is also a director at the National Bank or investment company of Belgium, said.
Hilgers told Reuters on Thursday. There’s also no benchmarks for measuring results from such investments, and how companies manage dangers will have to be “completely revisited”, phoning for specialist personnel, he said. Insurers would have to have clear “operational limits” for risk, with the panel associates and senior managers fully understanding the difficulty of some investments. Lewis Webber, head of insurance data analytics at the Bank of England’s Prudential Regulation Authority, told the … Read more