The insurance industrys total investment portfolio across Europe grew to about 8.5 trillion last year, according to an industry federation, but it warned Solvency II could undermine long-term backing firms can provide.

Today's Key facts booklet, published by Insurance Europe, found the industry investments had grown by 3.2% compared to 2012, based on constant exchange rates.
But with new capital rules coming into force in January 1 2016 as part of the Solvency II reforms, the group warned this could make it more expensive for insurers to invest in long-term government and corporate backed-bonds, as well as infrastructure projects. This is because the new regulatory regime will require increased levels of capital to be held against long-term investments.
Michaela Koller, the federation's general director, said insurers make huge contributions to the European economy by promoting growth and stability through long-term investments equivalent to around 60% of the continent's gross domestic product.
She said: 'This role, however, is under threat. While the industry welcomes the move to a risk-based regulatory regime and recognises that the final version of Solvency II was improved to avoid a huge negative impact on long-term investments, aspects of the directive and how it is implemented will still require insurers to hold inappropriately high amounts of capital against their long-term investments.
'This will make it more expensive for insurers to invest in long-term government and corporate bonds, as well as growth-stimulating activities, such as infrastructure projects.'
The booklet also highlighted that Europe continued to be the world's largest insurance market in 2013, making up 35% of the global market. It was followed by the US at 30%, and Asia at 28%.
Across the continent, total premiums were 1,119bn in 2013 and life benefits and non-life claims paid by European insurers totalled 943bn.
Of these, life insurers paid out 618bn in benefits to insurers in 2013, while non-life insurers paid out a total of 325bn in claims.