Total assets of euro area insurance corporations increased by €52 billion in the fourth and final quarter of last year relative to the figure recorded in the third quarter of 2021, according to fourth quarter statistics on Euro area insurance corporations released by the European Central Bank (ECB) today, Wednesday, March 2, 2022.

According to the ECB, total assets of euro area insurance corporations increased to €9,231 billion in the fourth quarter of 2021, up from €9,179 billion in the third quarter of 2021. Debt securities accounted for 37.8% of the sector’s total assets in the fourth quarter of 2021. The second largest category of holdings was investment fund shares (30.0%), followed by equity (11.9%) and loans (7.0%).

“Holdings of debt securities decreased to €3,487 billion at the end of the fourth quarter of 2021 from €3,519 billion at the end of the previous quarter. Net sales of debt securities amounted to €4 billion in the fourth quarter of 2021; price and other changes amounted to €27 billion. The year-on-year growth rate of debt securities held was -0.9%”.
European Central Bank

Looking at holdings by issuing sector, the annual growth rate of debt securities issued by euro area general government was -1.0% in the fourth quarter of 2021, with net sales in the quarter amounting to €7 billion.

_{Chart 1 : Insurance corporations’ holdings of debt securities by issuing sector}

Regarding debt securities issued by the private sector – euro area excluding general government – the annual growth rate was -2.1%, and quarterly net purchases amounted to €2 billion. For debt securities issued by non-euro area residents, the annual growth rate was 1.1%, with quarterly net purchases of €1 billion.

Insurance Corporations’ Holdings Of Investment Fund Shares

Turning to insurance corporations’ holdings of investment fund shares, these increased to €2,769 billion in the fourth quarter of 2021, from €2,686 billion in the previous quarter, with net purchases of €37 billion and price and other changes of €46 billion. The year-on-year growth rate in the fourth quarter of 2021 was 6.5%, the ECB stated in the report. The ECB explained that Investment funds include money market funds and non-money market funds.

_{Chart 2: Insurance corporations’ holdings of investment fund shares by issuing sector}

The annual growth rate of euro area money market fund shares held by insurance corporations was 1.0% in the fourth quarter of 2021, with net sales in the quarter amounting to €9 billion. As regards holdings of euro area non-money market fund shares, the annual growth rate was 6.7%, with quarterly net purchases amounting to €42 billion. For investment fund shares issued by non-euro area residents, the annual growth rate was 11.9%, with quarterly net purchases of €4 billion.

In terms of main liabilities, total insurance technical reserves of insurance corporations amounted to €6,947 billion in the fourth quarter of 2021, up from €6,911 billion in the third quarter of 2021. Life insurance technical reserves accounted for 90.6% of total insurance technical reserves in the fourth quarter of 2021. Unit-linked products amounted to €1,610 billion, accounting for 25.6% of total life insurance technical reserves.

The ECB explained that the ‘Other assets’ category includes currency and deposits, insurance technical reserves and related claims, financial derivatives, non-financial assets and remaining assets.