(Bloomberg) -- Swiss Re AG Chief Executive Officer Michel Liescalled for the creation of a special infrastructure asset class toallow insurers to invest in projects such as roads and bridges.
|“If you take all the insurance industry, all the money they caninvest, and if you take the infrastructure need of this planet --there is a perfect match,” Lies said in an interview in Davos,Switzerland.
|Insurers and reinsurers, which help primary insurers cover thecosts of damage claims, are looking for alternative opportunitiesas low interest rates erode earnings from fixed- incomeinvestments. At the same time European Commission PresidentJean-Claude Juncker is seeking private-sector support for his 315billion-euro ($365 billion) investment plan.
|Market regulators could “define infrastructure investment as aspecified class which allows a secondary market and which allowsinvestors who can invest long term to have an investment that isliquid during the time of investment,” Lies said.
|He said infrastructure investment “is on the top of the agenda”of the Obama administration in the U.S. and Juncker in Europe.
|“We should make sure that the rules of the game go in the samedirection as the political appetite,” Lies said. “We are veryactive in this area. Davos is a good opportunity to meet differentpeople and to discuss these kind of challenges.’”
|Barack Obama has pressed throughout his presidency for morespending on roads, bridges, railways and other transportationprojects. Last year, he proposed a four-year, $302 billioninfrastructure plan. Congress has ignored his request.
|While the “low-yield environment is challenging,” Lies saidthere’s also a silver lining. “If you cannot count on investmentresults, you need to be very disciplined in underwriting.” This isthe 8th time Lies is attending the World Economic Forum inDavos.
|--With assistance from Rebecca Christie in Brussels, MikeDorning and Joe Sobczyk in Washington and Jan Schwalbe inZurich.
|Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.
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