ABIR and Insurance Ireland push EU for securitisation reforms

The Association of Bermuda Insurers and Reinsurers (ABIR) and Insurance Ireland have called on EU policymakers to reform the bloc’s securitisation framework to allow insurers from Solvency II-equivalent jurisdictions to participate fully in the EU STS securitisation market, aiming to unlock capital for banks, businesses and consumers.

The joint position paper highlights that the current EU proposal risks excluding insurers from jurisdictions such as Bermuda and Switzerland, despite comparable prudential supervision, which could limit available credit protection capacity and constrain lending.

Moyagh Murdock, CEO of Insurance Ireland, said: “The European Commission’s 2025 proposal of opening synthetic STS to (re)insurers as protection providers, was an important and welcome step toward advancing the Savings & Investments Union. However, further progress is needed to support real market scale, as the current safeguards remain too narrow to enable a deeper, more scalable market.

John Huff, president and CEO of ABIR, added: “A well-functioning securitisation market will enable banks to manage risk efficiently, free up regulatory capital, and expand lending to households, small and medium-sized enterprises (SME), and long-term investment projects — often without transferring customer relationships or relying exclusively on funded capital market investors. Within this framework, unfunded credit protection provided by non-life re/insurers is a straightforward and well-established risk-transfer tool. By purchasing insurance against credit losses, banks can achieve significant risk transfer while retaining the underlying loan portfolios.”

The paper notes that insurers have been active in the EU synthetic STS market since 2018 and operate under robust Solvency II or equivalent third-country frameworks. Huff highlighted these points during a recent event at Insurance Ireland’s Brussels office, attended by representatives from the European Parliament, European Commission, and the global re/insurance market.

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