25.08.2014
Position paper

Insurers open to dialogue on infrastructure financing

The German Insurance Association (GDV) is in favour of increased dialogue between the public sector and private investors in order to sound out the possibilities for stimulating infrastructure investments in Germany. “It would make sense to sit all key players down at the table so that they could discuss their respective interests and formulate realistic goals”, said GDV President Alexander Erdland. Legal security, above all else, is important for insurers. “As long term investors, they have to be able to trust that the rules are not going to change retroactively once established”.

Erdland thus welcomes the initiative of Federal Economics Minister Sigmar Gabriel (SPD), who recently spoke out in favour of increased integration of private investors such as insurance companies and pension funds in order to close financing gaps in infrastructure. He admits that this cannot be done with state funds. A commission implemented by the 2011 Conference of Transportation Ministers concluded that around 7.2 billion EUR in additional financing will be required alone for the operation and maintenance of transportation infrastructure in Germany within the next 15 years.

Insurance industry ready to make large commitment

Insurers are ready to play a role as reliable long term investors, Erdland emphasised. Yet it would be desirable for politicians to prepare a schedule of future infrastructure projects and inform investors early on about them. “More planning security would make it easier for insurers to provide the financial resources necessary for infrastructure projects within the framework of their long term investment strategy”.

Alexander Erdland

Alexander Erdland, GDV President:

“More planning security would make it easier for insurers to provide the financial resources necessary for infrastructure projects within the framework of their long term investment strategy”

 
Due to the normally predictable and steady revenue streams, infrastructure investments are a good fit with the long term business model of insurers. Investments in renewable energies and infrastructure together currently make up less than one percent of the total investments of insurers in the amount of nearly 1.4 trillion EUR. If the framework conditions were reliable, insurers would be prepared to sharply expand their commitment in this area.

Position paper: Proposals how more private capital can be mobilised

The demand for a stabile legal framework and close collaboration between politicians and the insurance industry is reflected in the updated GDV position paper on improving the conditions for investments in infrastructure and renewable energies, which the Association published today. The document contains specific proposals as to how more private capital can be mobilised from the vantage point of the insurance industry. This includes for example lower equity backing requirements for infrastructure investments under the future Solvency II supervisory regime applicable as of 2016.


GDV position paper on improving the conditions for investments in infrastructure and renewable energies (German PDF only)

 
Published: August 2014

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Contact:
Christian Ponzel
Phone: (+49) 30 / 2020 – 5186
Mail: c.ponzel@gdv.de