Infrastructure for insurance investors: The regulatory landscape

Infrastructure investments have emerged as a prudent and attractive asset class for insurance companies due to their stable returns, long-term horizon, and alignment with insurers’ long-dated liabilities.

QIC’s latest Insight paper explores the regulatory landscape for infrastructure investments, particularly in the Asia Pacific region. It highlights the transition to risk-based capital frameworks and the favourable treatment expected for infrastructure equity and debt under various international insurance capital standards. These developments underscore the importance of infrastructure in insurance portfolios, facilitating optimal investment strategies and supporting various global initiatives, such as the energy transition.

The paper examines:

• The historical performance and growth trends of infrastructure investments compared to other asset classes
• The risk characteristics of infrastructure investments, such as stable cashflows, inflation protection, and low correlation with traditional assets
• The significant opportunity presented by the energy transition, aligning with insurers' sustainability goals, and mitigating climate change impacts
• The regulatory advancements in the Asia Pacific that enhance the attractiveness of infrastructure investments for insurers.

QIC believes that infrastructure investments offer insurers stable returns, long-term horizons, and alignment with their liabilities. The evolving regulatory frameworks in the Asia Pacific region, coupled with the expected upcoming IAIS group-standard, highlight the critical role of infrastructure in insurance portfolios, promoting global growth and sustainability.

To learn more, contact our Client and Business Development Team.