European insurers had €9,900bn of assets under management in 2014, according to figures published today by Insurance Europe, the European insurance and reinsurance federation.
Concerns remain, however, that Solvency II will exaggerate the risks associated with insurers' long-term investments, which will make it more expensive for insurers to continue making these investments, limiting the industry's capability to deliver a significant contribution to society.
In its annual Key Facts publication, the federation revealed the industry was the largest institutional investor in the EU in 2014, accounting for 63% of the EU's GDP, and achieved 9.4% growth compared with 2013.
Developments in the investment portfolio of European insurers are mainly driven by life business, given the investment holdings of the life insurance industry accounted for more than 80% of the total.
The investments of insurers from the UK, France and Germany combined represented more than 60% of all European insurers' investments. A study of a sample of European countries found that bonds (52.4%) were the largest component in insurers' investment portfolio. The second largest element was loans and mortgages (13.6%), ahead of investment funds with 13% of the total portfolio.
The federation said that the European insurance industry is well placed to provide long-term investment for sustainable economic growth, with long-term illiquid liabilities and €1,172bn of premiums to invest annually.
Insurance Europe director general Michaela Koller said: "While it is encouraging that these investments have continued to grow, policymakers need to ensure that regulatory capital charges are commensurate with the actual risk that these investments pose.
"We hope that this issue will be addressed as part of the EU Investment Plan to enable our industry to continue playing an increasingly important role in underpinning growth in Europe."
