MAS Offers S$30M to Help Insurers Invest in Infrastructure

The Monetary Authority of Singapore (MAS) has introduced measures to make infrastructure and securitised investments more appealing for insurers. A S$30 million grant, effective November 2, aims to directly address the operational costs and expertise required. This grant supports insurers in building investment teams, training staff, and engaging professional services, thereby reducing initial barriers to entry for these asset classes.

A key component of the MAS proposals is the reduction of capital charges for qualifying infrastructure investments and senior investment-grade securitisation tranches. Capital charges represent the amount of capital insurers must set aside against potential losses. By lowering these requirements, MAS effectively frees up capital that insurers can deploy elsewhere or enhances the return on equity for these specific investments, making them financially more attractive.

Additionally, MAS plans to recognise more credit assessment institutions and standardise disclosures. This aims to simplify the assessment process for insurers, potentially reducing the time and resources needed for due diligence. Such standardisation and broader recognition could make these complex investments more accessible and efficient for insurers to evaluate, aligning with the stated goal of attracting more long-term insurance capital into regional infrastructure financing.