Insurers face tighter infrastructure spreads as banks ramp up allocations

Competition squeezing returns on short-tenor instruments

The return of banks to commercial loan financing is squeezing the yields available on short-term infrastructure deals, say insurers.

European insurers Axa, Allianz and Ageas have recently made high-profile commitments to invest in infrastructure assets as they hunt for additional returns in the current low interest rate environment and have been looking to exploit the opportunity afforded by banks' withdrawal from the market in recent years.

However, some insurers are warning they could be