European Securitisations is entering a new phase as the European Commission introduces reforms designed to unlock insurer capital and expand bank funding. With more than €10 trillion in assets under management, insurers represent a vast yet underutilised source of long-term funding.

Historically, Solvency II capital charges and rigid prudential rules limited insurer participation. As a result, securitisations became less attractive than other fixed-income assets. The 2025 reforms directly address these barriers through two key measures:

• Recalibrating Solvency II capital requirements, aligning high-quality securitisations with the treatment of covered bonds.
• Recognising unfunded credit protection from insurers as eligible under the STS framework. This change makes insurance-backed Significant Risk Transfer (SRT) transactions more efficient.

Together, these reforms create a dual catalyst for insurer participation. They reduce capital costs for funded investments and open new opportunities for unfunded risk sharing. Moreover, they position insurers as strategic partners for European banks, helping transfer credit risk and expand lending capacity.

Looking ahead, these reforms are expected to unlock significant insurer capacity. They will increase market liquidity, improve pricing efficiency, and strengthen credit provision to the real economy. As a result, Europe can build a more dynamic and integrated securitisation market. This approach fully supports the ambitions of the EU’s Savings and Investments Union.

Read the full article here: Insurer participation in European securitisations