Eurozone insurers’ bets on alternatives raises systemic risk

Dutch firms have more than 25% of total assets tied up in non-traditional investments

Insurance companies across the European Union boosted their holdings of alternative assets such as infrastructure and private equity funds, loans and real estate in 2018.

The European Central Bank (ECB) found on average that insurers had 9.6% of total investment assets allocated to alternatives in 2018, up from 8.9% in 2017. The central bank wrote in its latest review of the eurozone’s financial system that this growth “raises financial stability concerns”.

The insurance sectors of 13