It is hard to underestimate the requirement for long-term investment in infrastructure, including energy transition and other net-zero directed assets, over the next 20-30 years. Accordingly, there is a clear opportunity as well as need for insurance companies to increase substantially their contribution to these sectors.
In the Forum's submission to the HM Treasury consultation on Solvency II reform, it is stated that as presented, the reforms would not incentivise an increased flow of long-term capital from insurance companies into the infrastructure sector, particularly in relation to the way that the matching adjustment is proposed to be reduced for assets with a wider premium for illiquidity.