Aviva has announced an immediate allocation of £500m to invest in UK infrastructure projects.
The news follows the pledge early this month of six insurance companies, including Aviva, to invest £25bn in UK infrastructure over the next five years.
The other five companies involved are Legal and General, Prudential, Standard Life, Friends Life and Scottish Widows.
The move has come after European wide insurance regulation Solvency II increased regulatory and political certainty for insurers investing in infrastructure.
UK insurers had expressed concerns about the directive, and Association of British Insurers director general Otto Thoresen had claimed the proposed rules posed a challenge to insurers’ ability to make long-term investments.
But the Treasury said negotiations over the details of Solvency II had “ensured those capital rules incentivised life insurers to invest in a wider range of assets, including infrastructure projects”.
Aviva said the money announced today would provide debt financing for projects in sectors including transport, utilities, health and education.
The company has made the funds available immediately, and is now assessing investment opportunities.
With 34m customers, Aviva is the UK’s largest insurer. It already has £5bn invested in UK infrastructure assets, including PFI loans for schools, universities and hospitals, and corporate bonds in utility, airport and rail companies.
Aviva group chief executive Mark Wilson said: “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.”
Financial secretary to the treasury Sajid Javid 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.
“I am very happy to see Aviva has already allocated £500m for growth boosting projects across the UK and look forward to working with them to support this investment.”