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Insurance invests one in every three euros in public debt – MAPFRE

14th July 2022 - Author: Daniel Jackson

The insurance sector invests one in every three euros in public debt, according to a new report by MAPFRE Economics.

The report, ‘Global savings after the pandemic and insurance industry investments’, also finds that most insurance companies’ investments are allocated to fixed income, both sovereign and private debt, which greater weight on the former.

This, MAPFRE says, shows that insurers’ balance sheets are generally very conservative; the nature of the business requires it, given the need to achieve the right match of term and interest rate between the liabilities assumed and the investment instruments backing them.

The new report looks at the investment portfolios of insurance companies, in the Eurozone, US, UK, Japan, Spain, Brazil, and Mexico. The findings show that in 2020 investments of the insurance sectors of these countries reached 21.955 billion euros, an almost 5% increase.

The ratio of investments to GDP has also been increasing. For example, in the UK, it has soared to a record 109.4%. In the Eurozone, the volume of investment in the insurance industry rose to 8 trillion 479.9 billion in 2020, up 3.8%, and now represents 74.4% of the region’s GDP.

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The Spanish market presents the highest proportion of fixed income investments in its portfolio, representing 55.0% of total investment.

“In Spain, it must be noted that the high percentage of investments in sovereign bonds, as well as the lower percentage of investments in variable income, compared to the Eurozone average,” the report says.

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