Zurich Insurance chief executive Mario Greco has cautioned that private capital groups, such as Apollo and KKR, could reshape the European insurance market in ways that may not align with the sector’s core purpose.
Greco (pictured) said the increasing role of private equity in insurance was being driven by asset-gathering strategies that focus on boosting investment portfolios. While this provides access to capital, he warned it risks clashing with the traditional role of insurers, which is centred on underwriting and long-term risk protection.
In a recent interview with the Financial Times, Greco said the philosophies driving these groups could lead to a mismatch with the needs of policyholders and with regulatory frameworks. He also stressed that insurance is about risk management rather than merely gathering assets.
Private equity interest in insurance has accelerated in recent years, particularly in the life and annuity sector. Firms have taken ownership stakes in carriers, backed reinsurance deals and acquired closed books of business as part of strategies to expand assets under management. Proponents argue this strengthens balance sheets and creates efficiencies but industry executives like Greco warn that it could tilt priorities toward short-term financial gains.
Meanwhile, regulators are monitoring the trend closely. The European Insurance and Occupational Pensions Authority (EIOPA) has highlighted the need for robust governance in transactions involving private capital, while the UK’s Prudential Regulation Authority has flagged risks around the transfer of legacy portfolios and reinsurance arrangements.
The US provides an indication of how the model may develop in Europe. There, private equity firms have already become major players in the life and annuity market, with companies such as Apollo and Blackstone managing large blocks of insurance assets. Supporters point to improved capital efficiency and innovation, while critics worry about exposure to riskier investments.
Greco’s comments highlight an industry debate that is likely to intensify as private equity continues to target insurance. The tension between protecting policyholders over the long term and delivering returns to investors is emerging as a central issue for the sector’s future.
