EU agrees capital rule easing for insurers to boost investment in green tech/infra

Written by Adam Cadle

14/12/2023

The EU has agreed a deal to ease its capital rules for insurers in a move its lawmakers said could free up tens of billions of euros for investing in green technology and infrastructure to boost growth.

The changes could allow the insurance sector to invest up to a further €100bn into the economy, equal to around 0.6% of the EU’s gross domestic product, the EU Parliament’s economic affairs committee said in a statement.

“Solvency II is the world’s gold standard for insurance regulation, but its calibration has been overly conservative,” Markus Ferber, the committee member who led the negotiations on behalf of Parliament, said.

The bulk of capital at EU insurers is being freed up by cutting the so-called ‘risk-margin’ to 4.75% from 6%.

"It will help the industry to remain key long-term investors who act as a stabilising force during periods of market volatility," Insurance Europe's deputy director general Olav Jones said in a statement.

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