Steady introduction of new regulation since the financial crisis had a significant impact on pension funds and insurance companies across Europe. One thing that seems certain is that the regulatory landscape will continue to change.
The Investment Solutions Center has extensive experience helping institutional investors across Europe to navigate the complex web of regulations and understand the impact on their business. Our experienced investment professionals will help you optimize your portfolio within the constraints of the relevant regulations. Key regulations affecting the pensions and insurance industries include:
A risk-based approach to determining regulatory capital poses a daunting obstacle to many insurers in achieving their long-term investment strategy goals. Drawing on our experience across Europe, our expertise can assist insurers in finding new asset classes and efficient combinations of existing asset classes that result in favorable treatment under Solvency II.
We have rich experience devising pension fund investment strategies within strict regulatory frameworks. A key example is the Dutch FTK ('financieel toetsingskader') framework, which is applicable for Dutch pension funds. Among other things, FTK has introduced smoothed liability valuations using an ultimate forward interest (UFR) rate applied to the swap curve. This means that pension funds must value their liabilities using rates which are not available in the market. We have built up sophisticated analytic skills and knowledge as a result of working within the constraints of the FTK environment and use these to improve outcomes for Aegon Asset Management's clients.
There have been significant changes to defined contribution pensions legislation in Europe in recent years. Prime examples are the introduction of pension freedoms in the UK and 'doorbeleggen' (broadly meaning continued investment before and after retirement) in the Netherlands. Both allow members more freedom to keep their pension savings invested after retirement rather than purchasing an annuity. Aegon Asset Management's Investment Solutions Center offers sophisticated modelling of life cycle strategies for both the accumulation and the payout phases that can be used to develop investment strategies tailored to a pension fund's membership and risk preferences.
EMIR introduced requirements around central clearing, risk mitigation, counterparty risk and the reporting of over-the-counter (OTC) derivatives contracts. Aegon's Investment Solutions Center offers in-depth analysis of how EMIR affects investors' derivatives strategy and collateral management, the potential risks and benefits of using centrally-cleared derivatives, as well as the effects on pricing.
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