The Value of Curiosity
Liane Hirner, CFRO of VIG, has a strong belief in the merits of listening. It is a trait that has helped her navigate the shifts seen in life insurance in recent years, including macro volatility and the advent of trends
There is no doubt about Europe’s investment needs. Estimates suggest up to €800bn is required to boost the continent’s economic transformation across digital, energy and infrastructure.
Institutional investors like insurers who want to participate have been stymied by stringent regulation in their efforts to do so. But with a raft of new legislation coming into effect in the next year, the European authorities are creating more investment avenues for insurers.
Alexandra Jour-Schroeder, Deputy Director General of the European Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union, is right at the top in setting the agenda for European investment regulation. She talks about the opportunities for Europe’s insurance community to increase their investment horizon and how the EU’s new securitisation and long-term equity investments frameworks and private assets will fit into the future of insurer investing.
— What need is there to open EU markets to institutional investors?
We see a strategic imperative to open and further deepen EU markets for institutional investors. According to the Draghi Report, to fund our dual green and digital transitions, as well as boost our infrastructure, Europe requires an estimated €750–800 billion in additional annual investment by 2030. Bank lending alone cannot bridge this gap.
Institutional investors – such as pension funds and insurers – are essential in connecting the substantial pools of private capital with long-term, risk-bearing productive investments. Under its Savings and Investments Union (SIU) strategy, the Commission introduced in October 2025 a targeted package specifically designed to mobilise insurers’ and banks’ capital. This included amendments to the Solvency II Delegated Regulation alongside new guidance under the Capital Requirements Regulation to incentivise equity investments, particularly alongside public entities.
In addition, by systematically dismantling cross-border barriers, we are actively unlocking institutional scale to drive European competitiveness thanks to access to a broader pool of investors, reduced dependency on bank lending and lower financing costs for companies.
— Retail participation in finance seems patchy across Europe. Some countries like Sweden and the Netherlands have shown more innovation and progressive risk-taking from the consumer base. Could you take the example of some of these countries, or maybe even the US, to progress the rest of Europe?
Retail market participation remains indeed highly uneven across the Union. Member States with higher financial literacy rates, such as Sweden and the Netherlands, consistently demonstrate much deeper capital markets.
To achieve widespread participation, financial literacy is just as important as having innovative investment vehicles like the Dutch pension model or Sweden’s Investeringssparkonto (ISK).
The EU Financial Literacy Strategy complements national initiatives by providing a vital platform for exchanging successful approaches, ensuring Member States can adapt these proven structural concepts to fit their own unique domestic landscapes.
Alexandra Jour-Schroeder
— One of the key EU initiatives right now is the review of the Securitisation Framework. Where are you with regards to the proposals on the new securitisation rules?
Work on the review of the securitisation rules is well advanced. Trilogue negotiations with the European Parliament and the Council have started and are continuing at a good pace. From the Commission’s perspective, the positions of the co-legislators provide a constructive basis for negotiation and preserve the direction of travel and the main objectives of our proposal. We look forward to working closely with the co-legislators to translate these shared objectives into a clear, workable and balanced final text.
— What were the main motivations with regards to this initiative?
Securitisation sits at the intersection of two shared objectives: safeguarding financial stability and strengthening the EU’s ability to finance the real economy. There are many reasons for reviving EU securitisation markets. Greater use of securitisation can allow banks and other lenders to finance the real economy, by freeing up their balance sheets and create new lending capacity for households and businesses, including SMEs. Furthermore, securitisation also widens the economy’s investor base, by allowing capital market investors to indirectly finance economic activities.
Our assessment of the current securitisation framework shows us that certain aspects come with an undue regulatory or prudential burden, hindering the development of the EU securitisation market.
Therefore the Commission’s proposed review aims to recalibrate the framework, striking a better balance between maintaining appropriate safeguards and boosting the securitisation market to support the financing and growth of the EU economy.
— Do you expect insurers to be able to invest more widely in securitisations following the release of the rules?
The Solvency II review significantly reduced the standard-formula capital requirements for non-STS (Simple, Transparent and Standardised) securitisation investments. Depending on the rating, the risk factor applicable to senior tranches will be reduced by up to 80% compared with the current rules. The review also aligns the treatment of senior STS securitisations with that of covered bonds.
In addition, our largest and well-capitalised insurers may play a greater role in credit risk transfer outside the banking sector. In recognition of this fact, the securitisation proposal extends eligibility for the STS label, and thus the favourable prudential treatment, to certain unfunded credit protection provided by qualifying EU insurers, subject to a limited set of strict conditions.
Together these measures will increase the risk sensitivity of the securitisation framework, facilitate credit risk transfer outside the banking sector, and create incentives for insurers to invest more in securitisation, in line with the objectives of the Savings and Investments Union.
— There is also the Long-Term Equity Investments (LTEI) framework. Do you think it is important to allow institutions like insurers to have greater flexibility to invest in equities?
This is an area we see real potential in, and one we have been working on closely as part of the Solvency II review. Insurers manage very long-dated liabilities, so they are well placed to support long-term investment in the real economy through equities.
The amendments simplify access to the preferential treatment for long-term equities, making it easier for insurers to finance European companies, including through private equity and venture capital investments. A preferential risk factor of 22% applies to qualifying long-term equity investments, provided insurers can demonstrate the ability to hold these positions for at least five years without being forced to liquidate, even under stressed conditions.
We also created a legal framework that, by January 2027, will allow equity investments sponsored by some public programmes, including those of the European Investment Bank, to be subject to even lower capital requirements.
Greater flexibility here matters. It is not about lowering prudential standards, the policyholder protection objective of Solvency II remains fully intact. It is about making sure the capital framework reflects what insurers are genuinely suited to hold given their liability profile. This should support both better long-term returns for policyholders and more capital flowing into European businesses, in line with the goals of the Savings and Investments Union.
— Private assets have been a big regulatory focus in recent times. Currently the EU appears lagging behind the US with regards to the private assets model. Are private asset markets something that can be a good source of growth for the EU? Or is it a risk?
Private assets, specifically venture-capital and private-equity models, are a vital catalyst for innovation and European competitiveness. For too long, the EU has lagged behind the US in scaling up innovative start-ups and SMEs due to shallower private-equity ecosystems and fragmented exit environments, which hindered growth and caused relocation.
Consequently, the SIU Strategy treats private equity as a core growth pillar. We are preparing legislative proposals to help scale-up Venture and Growth Capital Funds, improving financing channels for innovation. We are also continuing work on the optional “EU Inc.” to facilitate cross-border business scaling.
While consumer protection remains paramount, robust risk-management structures must co-exist with risk-capital deployment. Deeper private-equity markets provide firms with long-term-term, equity-based financing, reducing an over-reliance on bank debt.
— Lastly, where do you stand on the risk v opportunity debate in European markets. Has Europe been stymied by over-cautious regulations on its insurance investment sector or do you think these are adequate in providing consumer protection? Should we be more risk-takers in Europe?
The debate should not be framed as a choice between risk and opportunity; Europe must strike the right balance. While strong investor protection is essential to maintain trust, a lack of competitiveness poses a serious risk to our future prosperity.
With the SIU Strategy, we want to widen access to investment opportunities and help citizens make informed choices through stronger financial literacy and more accessible products, including Savings and Investment Accounts. In parallel, we want to remove those barriers that prevent institutional investors from supporting growth.
Our objective is not deregulation, but a smarter framework that supports participation and confidence. By shifting our focus toward integration, simplification, and scale, we can create more investment opportunities, while maintaining robust investor protection.
