Market report: Insurers share strong appetite for continued UK investment through pension books

In light of recent interest in the role pension funds might play in boosting productive investment in the UK, we conducted a market survey to explore what UK insurers are already doing in the UK investment space. Our survey sought insights from a number of leading life insurers in the UK market in relation to their appetite for investment in domestic assets, their plans for future investment and their thoughts on how the hurdles that could be removed to create more opportunities for insurers to invest in productive assets.

The feedback from insurers painted a healthy and active picture of UK investment into significant and varied productive UK assets across the infrastructure space. In this instance, the four significant insurers in the market interviewed:

• Have a combined bulk annuity book of GBP196.9 billion
• Have an average of 59% invested in UK-based assets (49%, 59%, 63% and 66% respectively)
• Cite a lack of market opportunities to satisfy investor demand as the biggest barrier to growing UK-asset capacity in their holdings
• Share a strong preference for UK investment, despite an international footprint

Comments from insurers therein expand on the challenges limiting further investment into UK assets, the potential opportunities around Solvency II, and long-termism in their UK investment appetite.