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    Opportunities for insurers: Securitisation regulation changes

    Opportunities for insurers: Securitisation regulation changes

    06 August 2025 Fixed income

    The capital treatment for senior simple, transparent and standardised (STS) issues is further by the proposed regulatory changes improved 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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