Solvency II amendment is unlikely to ease insurer involvement in infrastructure investment, says S&P Global Ratings

According to S&P Global Ratings, updated capital rules for EU infrastructure investments are “unlikely” to have a meaningful impact on insurers’ capital allocations to the asset class.

A delegated regulation (introduced in June 2017) reduces the risk calibration for qualifying infrastructure corporates by 25% compared to the standard formula. But Mar Beltran, S&P Global Ratings’ senior director and infrastructure sector lead, EMEA, says that this measure may fail to stimulate new infrastructure investment due to the underlying lack of projects for investors.

Beltran says: “As liquidity and capital continues to flood many infrastructure markets, we believe the impact of the regulation will be muted by the lack of institutional capacity and funding, which in turn has led to the accumulation of significant pools of private-sector funds and intensifying competition for assets.”

News of S&P Global Ratings’ report was covered by the specialist press, including: Partnerships Bulletin, IPFA, and Insurance and Management Europe.

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