Private Equity Ownership Of Insurers: EIOPA’s Expectations

Private equity investment in the insurance sector has attracted increasing supervisory attention in recent years. This follows a growing trend of private equity firms acquiring full or partial interests in insurance and reinsurance undertakings, particularly in the United States but also, increasingly, within the European Union.

Private equity ownership can bring clear benefits to an insurance undertaking, including access to capital, a more diverse investment strategy, operational efficiencies and strategic guidance. At the same time, the private equity model may introduce risks requiring closer supervisory scrutiny, particularly where the investor’s intended investment horizon does not align with the long-term nature of insurance liabilities or where the acquisition is followed by material changes to the undertaking’s business model, investment strategy or governance arrangements.