G-20 can stimulate economic growth by preventing barriers to insurers’ long-term

20 April 2015

The G-20 should prevent or remove regulatory barriers that discourage insurers from making long-term investments that underpin economic growth, according to the Global Federation of Insurance Associations (GFIA).


This was the message of a recent GFIA delegation to the G-20 Presidency in Turkey, to highlight the important economic and social role which insurers play in stimulating growth and ensuring stability in the global economy.


“Long-term growth needs long-term investment. With $4.6 trillion of annual premiums to invest and more than $26 trillion of assets under management, this is something that the global insurance industry is well placed to provide,” said Governor Dirk Kempthorne, GFIA chairman and president and CEO of the American Council of Life Insurers (ACLI).


“Insurers have a significant amount of long-term liabilities which need to be matched with long-term assets. This means that they are in a good position to support growth by stimulating long-term investments, such as those in infrastructure projects and small and medium-sized enterprises,” he added.


GFIA expressed concerns regarding the development of international capital standards (ICS) for the insurance industry by the International Association of Insurance Supervisors (IAIS). The risk is that, if developed against unrealistic timetables, these measures will not adequately take into account key features of the insurance business model and risk having unintended consequences, particularly for long-term investment.


Governor Kempthorne said: “The G-20 has the responsibility of guiding the international regulatory reform agenda. It should ensure that the ICS works with existing national regulatory regimes to develop a program of achievable incremental progress. Such an approach would have the best chance of reaching a result that is acceptable for all, and is the best way to avoid unintended negative consequences.”


The delegation also discussed: 

  • The need for a high level of transparency and accountability from international standard setters. 
  • The importance of international trade liberalization, open markets and regional and global efforts to remove unnecessary trade barriers. 
  • The collaborative work of governments to strengthen tax systems to combat tax evasion and avoidance.
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