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
Legacy blocks, mass lapse, private capital, and asset-intensive reinsurance are not separate debates. They converge into a single supervisory trajectory: ending regulatory ambiguity and finally creating a level playing field.
The global life reinsurance market is expanding fast. Dedicated capital now exceeds USD 160 billion. Third-party capital — largely private equity and asset managers — represents roughly a third of that total, more than doubling in three years. Growth is accelerating across Europe, Asia, and emerging markets alike.
This is a power shift. Balance sheets are increasingly engineered. And this is good news: when engineering reflects genuine risk transformation, the system becomes more efficient and resilient. The problem arises when engineering replaces substance.
In a system where risk can be reshaped, relocated, and repackaged, regulation is not friction. It preserves the meaning of our industry. But this only works if regulation itself is anchored in substance. The objective is not more rules — it is rules that enforce outcomes. And the uncomfortable reality is clear: the market has outpaced the consistency of its own regulation — in Europe and, more importantly, globally.
Mass lapse the first line drawn
The European Insurance and Occupational Pensions Authority (EIOPA) work on legacy blocks may appear as a very timely amuse-bouche, but mass lapse was the first real testing point. When rates rose, the industry confronted the latent volatility of Solvency II. And that is where reinsurance started to show its potential. Some structures moved real, enforceable risk. Others moved only its appearance. At times, both were treated as equivalent.
They are not. Market participants ignoring regulatory intent act like rotten apples in a basket — creating space for local divergence and, ultimately, regulatory pushback even on genuinely value-enhancing solutions.
EIOPA’s response was surgical: risk transfer must be demonstrable over the SCR horizon; termination rights cannot neutralise exposure at stress; attachment points must reflect genuine economic risk; contract features must be assessed in aggregate, not engineered in isolation.
However, material interpretation inconsistencies remain. Convergence has not been fully delivered. Yet.
“In a system where risk can be reshaped, relocated, and repackaged, regulation is not friction. It preserves the meaning of our industry.
But this only works if regulation itself is anchored in substance.”
Private capital
Third-party capital now represents one-third of global life reinsurance capacity, more than doubling since 2022. Its growth reflects the sector’s structural appeal: long-duration liabilities, predictable cash flows, and the ability to combine insurance risk with private asset origination. Competition is intensifying, and solutions are expanding — particularly in asset-intensive and structured transactions.
As EIOPA stated in its recent consultation paper, the real question is alignment, not ownership: incentives, governance, and where risk truly resides.
What private capital has done — more than anything else — is expose the system’s sensitivity to structure. The same underlying risk can now be held through fundamentally different configurations: traditional balance sheets, vertically integrated platforms, multi-layered group structures spanning jurisdictions.
The debate is not ideological. Private capital brings capacity, expertise, and discipline. But it also introduces new layers of complexity. Supervision is moving in a predictable direction: not to constrain participation, but to ensure that different ownership models carry the same risks and face the same standard.
Asset-intensive reinsurance
At its best, asset-intensive reinsurance is one of the most powerful tools available to the industry. It allows insurers to transfer long-duration liabilities to platforms with greater asset sourcing capabilities, unlock capital for growth, and deliver enhanced returns that ultimately benefit policyholders through more competitive products and stronger balance sheets.
But its effectiveness depends entirely on execution. Valuation of illiquid assets, concentration of exposures, reliance on complex collateral structures, and assumptions around recapture and liquidity under stress can all create vulnerabilities, particularly when multiple structures are exposed to the same underlying drivers.
Global regulators are no longer debating — they are triangulating the same risks from different angles. What is (slowly) emerging is a more coherent supervisory diagnosis of the model. The International Association of Insurance Supervisors has pointed to illiquid asset build-up and counterparty concentration. The National Association of Insurance Commissioners is pushing for transparency on reserves and backing assets. The Prudential Regulation Authority has tightened their stance. The Bermuda Monetary Authority is strengthening approvals, capital, and liquidity requirements.
Individually, technical interventions. Taken together, a direction. Capital relief is only as strong as the assets, liquidity, and governance that support it under stress. What may appear restrictive is, in reality, the foundation for a sustainable (and truly global) market. Across mass lapse, private capital, and asset-intensive reinsurance, the pattern is the same. Different entry points. Same destination.
This is what convergence looks like in practice: not necessarily new rules, but the gradual removal of everything that allowed the same context to produce different answers. The winners will not be those who adapt fastest to the rules. But those who have the least distance to close when supervision catches up. In the next era of life reinsurance, credibility will outweigh cleverness, substance will outweigh structure, and resilience will be the currency of advantage.
