Non-life firms look to infrastructure to match PPOs
General insurers in the UK are beginning to consider investments in illiquid assets such as infrastructure as they seek to match long-term liabilities in the form of periodical payment orders
UK general insurers are increasingly looking to invest in long-dated illiquid assets such as infrastructure to hedge growing long-term liabilities in the form of periodical payment orders (PPOs).
PPOs are UK court orders to pay compensation to accident victims, usually with long-term disability, over regular periods rather than in a lump sum. They are growing in number since they were first introduced nine years ago and are a problem for general insurers because they add inflation and longevity
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