Non-life firms look to infrastructure to match PPOs

UK general insurers eye illiquid assets to match growing long-term liabilities

Mainstream wind farm in Chile

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