EU's Investment and Savings Strategy Endorsed by Insurance Europe
The European Union is moving forward with plans to establish a Savings and Investment Union (SIU), an initiative proposed in March 2025. This strategy aims to boost retail participation in capital markets across the EU by encouraging long-term saving and providing easy access to a broad range of investment products.
One of the key stakeholders in this development is the insurance industry. Thea Utoft Høj Jensen, Director General of Insurance Europe, has emphasised the importance of an inclusive plan that promotes a wide range of investment and insurance solutions. Insurers, according to Insurance Europe, can increase consumer choice, market competition, and drive innovation.
The insurance industry provides financial guarantees and insurance protection to many savers who might not otherwise invest. They offer a range of life investment and pension products that cater to people with varying needs and risk profiles. Insurers are also close to people due to their wide network of distributors.
Insurance Europe has expressed concerns that the European Commission's plan to develop savings and investments 'accounts' will fall short if it does not include insurers as product providers. They urge the European Commission to ensure that the forthcoming recommendation is inclusive and not restrict its scope to 'accounts'.
EFAMA (the European Fund and Asset Management Association) strongly supports the introduction of Savings and Investment Accounts (SIAs), urging EU Member States to adopt them widely to boost retail investment. Key features for success, as highlighted by EFAMA, include promoting long-term savings through incentives to discourage early withdrawals, allowing a broad range of eligible assets, setting sufficiently large deposit limits, and ensuring simple access without additional suitability checks under MiFID rules.
Financial and insurance education remains key in increasing citizens' awareness about investment opportunities. It plays a crucial role in increasing citizens' understanding of the different investment options available in the market. Insurance Europe calls on EU policymakers to reduce protection gaps and increase private investment.
Various governments seek to unlock pension contributions and savings capital for projects such as Net Zero, societal engineering, food chain transition, land acquisitions, carbon capture, and more. The issues of regulatory frameworks for these projects are currently being discussed.
Europe's insurance industry welcomes the report by Mario Draghi on the best uses of EU-wide insurer investment funds. The insurance industry continues to emphasise the importance of national tax incentives for products that bring societal benefits.
As the EU's SIU strategy progresses from the consultation phase toward concrete proposals and implementation guidance, there is potential for significant expansion of insurance-based savings and investment offerings in the EU market. The current status is that Member States are encouraged to implement SIAs nationally, while the Commission is collecting feedback on prudential rules and preparing detailed guidance expected in late 2025.
In conclusion, the European Union's Savings and Investment Union presents an exciting opportunity for the insurance industry to play a significant role in promoting long-term savings, increasing consumer choice, and driving innovation in the EU market.
- The European Commission's regulation regarding Savings and Investment Accounts (SIAs) should be inclusive and not limit product providers to only 'accounts', as suggested by Insurance Europe, to drive innovation and increase consumer choice in the insurance industry.
- As the European Union's Savings and Investment Union moves towards implementation, the insurance industry anticipates a significant expansion of insurance-based savings and investment offerings, especially in the areas of long-term savings, societal engineering, and Net Zero projects, fostering finance, business, and regulation growth.
