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Opportunities for insurers:

Proposed securitisation regulation changes

Opportunities for insurers: Proposed securitisation regulation changes

06 August 2025 Fixed income

The capital treatment for senior simple, transparent and standardised (STS) issues is further improved by the proposed regulatory changes, with the capital efficiency of portfolios already holding these types of assets likely to be enhanced.

Senior non-STS instruments will benefit substantially from the changes which could lead to their being significant demand for segregated portfolios of AAA rated collateralised loan obligations (CLOs) from larger insurers.

Existing asset-backed security (ABS) pooled funds, which had previously been highly capital inefficient are likely to become much more attractive for insurers from a capital-adjusted expected return perspective.

Figure 1: Proposed capital charges for senior STS positions

Opportunities for insurers_Picture1_06082025_V4.png

Source: Draft Commission Delegated Regulation amending Delegated Regulation (EU) 2015/35 on Solvency II.

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