UK insurers have delivered £5bn ($7.5bn) of the £25bn they promised under the country's Insurance Growth Action Plan (IGAP) launched in 2013, according to the Economic Secretary to the Treasury Andrea Leadsom.
Speaking at a Lloyd's meeting on 7 January, Leadsom said creating the right regulatory conditions for infrastructure investment has been a focus for the government.
"We made negotiations on Solvency II a priority and negotiated a good outcome, with a matching-adjustment that actively promotes long term investment growth.
"On the back of this positive outcome, insurers are now in a better position to take long term investment decisions – creating benefits to policyholders and, ultimately, the growth we all want," she said.
As part of the IGAP, six insurers – Aviva, Friends Life, Legal & General, Prudential, Scottish Widows and Standard Life – committed to deliver at least £25 billion of investment in UK infrastructure in the next five years.
To date, investments have included housing, energy, social and transport infrastructure projects.
Leadsom cited Prudential's investment of up to £100m in the Swansea Bay Tidal Lagoon project and Aviva funding 178 residential properties in Oxfordshire for GreenSquare Community Homes. Legal & General has invested £252m with Places for People, which will contribute towards the building of affordable housing across the UK. Standard Life has invested £80m with Town & Country Housing Group, in providing social housing in the heart of Kent and East Sussex.
Leadsom said the commitment from the insurance sector in UK infrastructure was further illustrated following the recent decision to exempt interest on private placements from withholding tax.
"Over the next five years, Allianz Global Investors, Aviva, Friends Life, Legal & General, Prudential and Standard Life intend to make investments of around £9bn in private placements and other direct lending to UK companies," she said.
People:Andrea Leadsom