Insurance EuropeInsurance Europe
Position Paper
Response to EFRAG consultation on long-term investing activities business models

Insurers’ business models are such that the insurance liabilities’ profile is the main driver of investment behaviour. Insurance liabilities are to a large extent long-term and predictable, with stable cash-flow profiles. Therefore, insurers are substantially able to match long-term liability profiles with investments held for the long-term.

Because most insurance policies create predictable and long-term liabilities for insurers, they can invest in both long-term and illiquid assets. The insurance business model is centred around asset-liability management (ALM) in which insurance liabilities, guarantees and the related financial and non-financial assets backing them (including derivatives) are managed together.

Published 25 June 2013
Olav Jones
Olav Jones
Deputy director general/Director, economics & finance