Mobilizing Insurance Investment in Sustainable Infrastructure
With approximately US$33 trillion in assets under management (AUM), insurers rank alongside pension funds as the world’s largest long-term investors. Historically, insurers invest less than 2.5% of their portfolio in infrastructure even though infrastructure offers an attractive investment opportunity because it can deliver predictable and stable cash flows that match insurers long-term liabilities while also generating an illiquidity premium. Additionally, as underwriters, insurers are well-positioned to understand physical climate risks and the advantages of investing in infrastructure that is low carbon and resilient to climate change. The virtuous cycle between investment and underwriting make insurers exceptionally well-positioned to lead the way on climate-smart investments.
This report breaks down the technical, regulatory, and financing challenges insurers face in scaling investment into low-carbon and climate-resilient infrastructure and offers solutions and insights into how the UN system and development finance institutions (DFIs) can support the industry to allocate a greater portion of its AUM into this critical asset class.