Solvency II: Prudential treatment of equity exposures

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Insurance companies are important investors in EU capital markets. Most of their investments are in debt instruments, while equity investments can contribute to higher returns for policyholders and overall EU economic growth. This study analyses the treatment of equity investments by insurance companies in (proposed) EU legislation; it is considered that this legislation will have limited impact on equity investments. To enhance equity investment significantly drivers other than prudential ones would have to be targeted.

This document was provided by the Policy Department for Economic, Scientific and Quality of Life Policies of the European Parliament at the request of the Committee on Economic and Monetary Affairs (ECON). It is also available in this link

Inna Oliinyk is a Researcher in the Financial Markets and Institutions Unit at CEPS and the Coordinator of the Network of the EU IFIs.  

Willem Pieter de Groen is Senior Research Fellow and Head of Financial Markets and Institutions Unit