Insurance Europe has submitted its response to a consultation by the International Association of Insurance Supervisors (IAIS) on structural developments in the life insurance sector.
The consultation focuses on the increasing use of alternative assets and asset-intensive reinsurance (AIR) arrangements by life insurers and the potential implications for supervision and risk management.
The industry group’s submission outlines its position on the evolving investment landscape, existing regulatory frameworks and the importance of early stakeholder engagement in regulatory processes.
Insurance Europe noted that life insurers play a central role in providing long-term savings and retirement products in Europe.
According to the organisation, this role has been affected by regulatory requirements under Solvency II and an extended period of low interest rates, both of which have influenced insurers’ ability to offer cost-efficient products.
In response to the current market environment, life insurers have increased their allocation to alternative assets and made greater use of AIR transactions. Insurance Europe said that these approaches support portfolio diversification and may contribute to improved long-term outcomes for policyholders.
AIR transactions are described as subject to established due diligence and risk assessment procedures. The association argues that these transactions are part of broader efforts to manage long-term liabilities and improve capital efficiency.
The submission also highlights the insurance sector’s experience in handling complex risks, including those identified in the IAIS’ draft paper such as valuation challenges and data constraints.
Insurance Europe maintains that the current Insurance Core Principles (ICPs) provide a sufficient regulatory foundation for overseeing both alternative assets and AIR.
While it sees no need for major changes to existing standards, the association supports certain clarifications, including a more precise definition of AIR to support supervisory consistency.
Insurance Europe also encourages the IAIS to engage industry stakeholders earlier in the policy development process. It recommends the use of technical workshops and expert dialogue to ensure that any regulatory developments reflect operational realities and market practices.
The IAIS consultation is part of a broader review of structural shifts in the global insurance sector. Insurance Europe’s response reflects the industry’s view that while investment strategies are evolving, existing risk management tools and supervisory frameworks remain relevant and effective.
