Aviva announces that it is making an immediate allocation of £500 million to invest in UK infrastructure projects.
This commitment is a direct result of the recent agreement on Solvency II, the European wide insurance regulation, which provides greater regulatory and political certainty for insurers to invest in infrastructure assets.
Aviva's allocation today is the first tranche of the wider insurance industry's commitment to invest £25 billion in UK infrastructure in the next five years.
Aviva expects to allocate new funding for debt financing of UK infrastructure projects in a range of sectors including transport, utilities, hospitals and schools. The funds to support this investment are available immediately, are in addition to Aviva's existing level of infrastructure investments, and Aviva is already evaluating a number of potential investment opportunities.
Aviva has an established track record of investing in infrastructure and currently has £5 billion invested in a range of UK infrastructure assets including PFI loans for social infrastructure such as schools, universities and hospitals and investments in corporate bonds of utility, airport and rail companies. Aviva makes long term investments in a number of asset classes, including infrastructure, which are low risk and provide an appropriate return to meet the long term commitments we have to annuity customers in the UK.
Speaking at the launch of the UK Insurance Growth Action Plan, Mark Wilson, Group Chief Executive Officer, said: "As a UK business with long term customer commitments we cannot just focus on today; we must be a good ancestor. Aviva is contributing the building blocks of the UK's future, making an additional £500 million available immediately to invest in the country's schools, hospitals and transport. We'll focus on investments which are good for our policyholders, good for society and good for the UK economy.
"As a direct consequence of the recent agreement on Solvency II, we now have the political and regulatory foundations to invest in the country's infrastructure. The Government recognises we cannot build on shifting sands and it is essential that the Government, the regulators and the EU act together."
Sajid Javid MP, Financial Secretary to the Treasury, said:
"The insurance sector is a leading example of the UK's position as a centre for global finance and we intend to keep it that way. That is why we are launching a UK insurance growth action plan today, to further strengthen the sector's contribution to economic growth and set out how we will work with industry to enhance the UK's position as a global leader in a truly global industry.
"This is already bearing fruit, just two weeks ago six major insurers announced their intention to invest at least £25 billion in infrastructure projects, and I am very happy to see Aviva has already allocated £500 million for growth boosting projects across the UK and look forward to working with them to support this investment."