Insurance firms urged to invest in infrastructure

The Insurance Commission (IC) is pushing for the insurance industry to explore more investment opportunities in the infrastructure sector as it could present higher yields compared to equities and fixed income securities.

Insurance Commissioner Dennis Funa said the agency is keen on loosening its regulation on alternative investment vehicles, such as real estate and infrastructure related projects to give firms more options to grow their money.

“The IC is looking at putting in place a regulation to guide insurance companies in infrastructure and publicprivate partnership ( PPP) project investments,” Funa told reporters during a press briefing.

Funa said the IC is looking particularly at infrastructure projects as it sees a boom in the sector, considering the plans of the government to intensify its infrastructure spending in the next few years.

According to the commissioner, insurance firms can either buy infrastructure-related financial instruments, such as corporate or PPP bonds, or invest directly in the stocks of companies involved in infrastructure projects.

“Financial investment companies can propose creating PPP bonds, which they can market to insurance companies, and that is where they will seek the approval of the IC. That is one,” Funa said.

“Second is direct investment, if

they can buy equities in infrastructure companies. The insurance companies can provide funding, and that will have to be subject to the approval of the IC,” he added.

The commissioner assured that whichever means the insurance companies choose, the IC would support them as returns from infrastructure is expected to be huge.