The €2.6tn part of insurers’ portfolios that asset managers should treat differently

One of the largest pools of assets reported by European insurers is also one of the easiest to misinterpret.

Unit- and index-linked assets sit on insurance balance sheets, but the investment risk is principally borne by policyholders. That distinction matters when measuring insurers as institutional investors.

A euro in a traditional general account and a euro in a unit-linked contract are not economically equivalent.

In the former, the insurer must invest against liabilities while managing guarantees, capital requirements and asset-liability risks. In the latter, the investment decision is much more directly connected to the product selected by the policyholder.

The distinction has become increasingly important as unit-linked business has expanded across Europe.

Headline figures for insurance assets can consequently give an inflated impression of the capital over which insurance investment teams exercise conventional balance-sheet discretion.

None of this makes unit-linked assets commercially unimportant. They represent a large distribution market for investment products.

But they answer a different question.

To understand insurers as investors, general-account and unit-linked assets should not be put in the same bucket.

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What does it cost in 2026 to manage €100bn of insurance assets?