Investment in infrastructure

​​​​​​​​​​​​​​EIOPA's work stream on investments in infrastructure by insurers

In recent years, infrastructure investments have been increasingly at the centre of discussions regarding growth promoting initiatives at a global, European and national level. Insurers could be an important source of funds for infrastructure investments as the long-term nature of their liabilities may mean that such investments are suitable for their risk profile.

On the 14 October 2015, EIOPA received a request from the European Commission (EC) for further technical advice on the issue of infrastructure corporates. This followed previous analysis by EIOPA on the treatment of investments in infrastructure within the Solvency II framework, first as part of the Technical Report on Standard Formula Design and Calibration for Certain Long-Term investments, and afterwards ​in response to a call for advice on the identification and calibration of infrastructure investment risk categories (work stream on infrastructure projects - see below for more details).

Main goals of the work stream on infrastructure corporates:

  • Identify criteria to define a class of safer debt and equity investments in infrastructure corporates;
  • Develop a rigorous framework for insurers performing due diligence on such investments;
  • Analyse the appropriate calibration of such investments, in line with the 99.5% value-at-risk measure provided for by Article 101 of Solvency II.

​​​Timeline​​​

Date​ Activity
14 October 2015EIOPA receives a request for further technical advice from the European Commission on infrastructure corporates
19 November – 10 DecemberEIOPA issues a Call for Evidence on infrastructure corporates
12 FebruaryRoundtable discussion
15 April – 16 May​Consultation paper on draft advice on infrastructure corporates
30 June 2016​Submission of final advice on infrastructure corporates to the European Commission 

EIOPA's work stream on investments in infrastructure projects by insurers conducted in 2015

Main goals

  • to develop a definition of infrastructure investments that offer predictable long-term cash-flows and whose risks can be properly identified, managed and monitored by insurers;
  • to explore possible criteria for the new class of long-term high quality infrastructure assets covering issues such as standardization and transparency; and 
  • to analyse the prudentially sound treatment of the identified investments within Solvency II, focusing on their specific risk profile.

​​​Timeline​​​

​​Date​​​​Activity

​​27 February 2015

First r​oundtable discussion 

Agenda and participants ​

​27 March 2015 – 26 April 2015

​Public Consultation on Discussion Paper

​18 May 2015
Second roundtable discussion
1 July 2015 – 9 August 2015
​​Public Consultation on draft Advice
​4 September 2015
Public Hearing on draft Advice
29 September 2015EIOPA publishes Final Report on CP no.15/004 and submits technical advice to the European Commission.