On the go: The government should use Brexit to loosen insurance regulation in order to “put our country’s pension funds to national use”, Aviva chief executive Amanda Blanc has said.
Blanc, whose comments were first reported by The Daily Telegraph, joins a growing chorus of support for designing a more nimble framework than the EU’s Solvency II regime.
The rules, which cover insurance companies’ governance, risk management and reporting, set requirements on keeping large sums of cash on balance sheets, and effectively tell providers in what they can and cannot invest.
UK insurers still adhere to Solvency II following the UK’s departure from the EU, although in 2020 chancellor Rishi Sunak launched a review of the framework.
Blanc said: “The old European solvency rules created certain barriers to […] long-term investment, but Brexit has provided the opportunity to change that.
“If done right, this will be good news for savers and good news for much-needed UK investment. It is time to make sure that we can put our country’s hard-earned pension funds to positive national use.
“The UK pensions industry is a massive home-grown advantage with up to £1.5tn to invest,” she added.
Earlier in January, the Pension Insurance Corporation estimated that appropriate reforms to Solvency II could boost its own planned investment in “productive finance”, from £30bn to £50bn by 2030.
PIC suggested that ideal reforms to the framework would preserve insurer balance sheet resilience while discouraging investment in riskier assets in overvalued markets.
An updated regime should also encourage investment into productive finance and “bank the UK’s ‘Brexit bonus’ by ensuring a competitive UK insurance industry”, it stated.
“The life chances and financial security of millions of people across the country depend on the timely and successful reform of this key piece of financial services regulation,” PIC chief executive Tracy Blackwell said.
