UK Insurers Call for Public-Private Collaboration to Drive £100bn Green Investment

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UK insurers are urging the establishment of new public-private partnerships to facilitate the deployment of £100 billion in investment, enabled by post-Brexit regulatory reforms, into green infrastructure projects.
The Solvency II reforms, hailed as a significant “Brexit dividend” by ministers, aim to encourage additional investment by UK insurers in domestic infrastructure. However, the industry warns of a shortage of viable projects that could impede efforts to expand financing.

The Association of British Insurers’ Investment Delivery Forum proposes that new public-private partnerships, supported by taxpayer funds, could mitigate risks. These partnerships could stabilize investment returns, helping projects attain an investment-grade credit rating and aligning them better with insurers’ long-term liabilities.

The report also suggests broadening the mandate of organizations such as the National Infrastructure Commission, reducing their vulnerability to short-term political fluctuations. Regarding regulation, the forum explores the concept of a “sandbox,” allowing the industry and its regulator, the Bank of England’s Prudential Regulation Authority, to discuss and assess asset eligibility for insurer portfolios.

Using the Thames Tideway Tunnel as an example, the forum suggests that replicating its financial structure could attract more insurer investment across various sectors. However, critics have raised concerns about the project’s impact on taxpayers and customers. Further dialogue and refinement are necessary to ensure the success of these proposed initiatives in driving sustainable green investments in the UK.