Insurance Europe has expressed support for the European Commission’s Action Plan, which focuses on using insurance and investments to finance growth in support of the Commission’s objectives of promoting a more sustainable world.
Olav Jones, deputy director general of Insurance Europe, said: “The European Commission’s efforts to connect finance with the specific needs of the European and global economy for the benefit of the planet and our society are welcome.
“The insurance industry is keen to continue playing a key role in these efforts, and many companies are already embedding sustainability objectives in their product development and investment strategies. Naturally, the investments must still be good ones that are right for our customers.”
The Commission’s plan proposes to increase European sustainability through investments in climate mitigation and adaptation projects, and in social projects like schools, hospitals, and social housing.
Insurance Europe has welcomed recognition of the value of these investments, and has also expressed support for an EU label on green financial products, which it believes will support a more sustainable industry.
“The insurance sector, with its long-term investment focus, is particularly suited to supporting sustainability,” said Jones. “Our industry has already demonstrated its interest in long-term sustainable assets.
“However, insurers’ willingness and ability to invest in sustainable assets is not matched by the supply of suitable projects. The industry therefore welcomes steps by the Commission to increase the supply of appropriate infrastructure assets across member states.”
Insurance Europe also stressed that the insurance industry supports rules based on measuring and capturing real risks, and that prudential regulation must disregard artificial incentives and recognise the actual risks related to green and sustainable investment.
Jones added: “In the Solvency II regulation that governs EU insurers, the risks relating to long-term business and investments, including sustainable ones, are currently not correctly measured. This creates unnecessary disincentives.
“The upcoming Solvency II 2020 review, mentioned in priority action 8 of the Action Plan, must be appropriately scoped and address the pertinent questions and valuable recommendations made by the High-Level Expert Group on Sustainable Finance.”
