Europe's insurers turn to risky property
Friday, 03 04 2016, Category: Insurance and Reinsurance, Country: Europe
Traditionally conservative European insurers and pension funds are turning increasingly to risky property bets on everything from new homes in provincial Britain to car parks at Brussels airport, as they feel the pinch from rock-bottom interest rates.
While much is in the form of equity stakes, they are also providing loans secured against property, moving into territory where banks have retreated since the global financial crisis.
"The banks have taken a couple of steps back and are not providing the same amount of credit," said Johan Held of AFA, a Swedish insurer which has spent one in seven euros of a 20 billion euro ($22 billion) fund on property. "Many of the insurance companies are stepping in to fill the gap."