Generali executive calls on European Commission to ease capital rules

EU Parliament

European Union regulators should ease Solvency II capital charges on insurers to enable them support Jean-Claude Juncker’s plans to boost growth through infrastructure projects, a senior Generali executive has warned.

Juncker, the European Commission president, outlined an ambitious €300bn (£218 billion) infrastructure investment plan last year that requires private sector money to help fund projects.

But Generali chief financial officer Alberto Minali, told a conference yesterday that the Solvency II capital rules for insurers, which are due to be introduced next January, would make it too pricey to invest in infrastructure.

Minali said at the Economist insurance conference in London that the EU rules, which require insurers to set aside capital against various investments in case they turn sour, were driving insurers to put money into government bonds and other traditional assets rather than job generating.

Appealing for Juncker to help the insurance industry, he said: “With the current Solvency II framework, it is not possible to allocate enough capital to support such investment,” he said. “I would say to reduce the capital charge on other asset classes, for example private equity.”

Justin Excell, head of asset management at Swiss Re, also told the conference that capital charges were “way too high” to sensibly invest in infrastructure.

But Carlos Montalvo, executive director of the EU’s European Insurance and Occupational Pensions Authority, said that despite some imperfections, Solvency II was not the main obstacle to infrastructure investment.

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