Focus: Swiss Re collaborates with the World Bank on infrastructure investment strategies
According to the OECD, less than 1% of the USD 80 trillion or so managed by institutional investors (eg re/insurance companies and sovereign wealth funds) is earmarked for infrastructure investment. However, emerging markets and developing economies, especially, are facing a massive gap in infrastructure investment: it is estimated that an additional USD 1 trillion to USD 1.5 trillion will be required to meet demand until 2020 alone.
To unlock the potential of infrastructure investment, the World Bank has launched its Global Infrastructure Facility (GIF), a partnership of public and private sector entities. We took part in the GIF’s launch event in 2014 to announce our collaboration as an advisor. Swiss Re and other re/insurers can play a crucial role in promoting infrastructure investment: not only is our industry one of the largest institutional and long-term investors, it also offers the risk transfer solutions needed to protect investments.
To attract more long-term investment, however, infrastructure needs to become established as a standardised and tradable asset class. In our cooperation with the GIF, we focus both on infrastructure as an asset class and effective risk transfer solutions.