Investments

ILA and the EU Regulations 2020

The European Union (Shareholders’ Rights) Regulations 2020 promotes long-term shareholder engagement by institutional investors, including life assurance companies such as Irish Life, where they invest in European companies listed on regulated European markets. Active ownership is considered to promote sound corporate governance within firms and is viewed as being a key contributor to moving to a more sustainable economic model in the future.

Engagement Policy

A specific requirement is to develop and publicly disclose an engagement policy that describes how Irish Life engages with certain firms in which they invest. The majority of Irish Life’s equity investments are managed by our sister company Irish Life Investment Managers (ILIM). On our behalf, ILIM considers a range of Environmental, Social and Governance (ESG) criteria when choosing the equities in which we invest and while continuing to hold these equities. They do this by actively voting on the various proposals put before the shareholders and proactive engagement either on an individual or collective basis with other like-minded investors.

Responsible investing has been part of ILIM’s philosophy for over a decade and reflects Irish Life’s belief that active ownership of equities plays a key role in driving positive change in corporate behaviours leading to more sustainable business practices and increased returns for investors. Since 2010, ILIM has been a signatory to the Principles for Responsible Investment (PRI), a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice. ILIM’s Responsible Investing Policy, has been endorsed by Irish Life’s Executive Investment Committee and outlines how ILIM conducts its engagement and interaction with the management of the companies in which it invests. It also describes how it manages potential conflicts of interest and monitors investee companies on relevant ESG matters.

A small proportion of the funds we invest on behalf of policyholders is managed by three other investment managers (Setanta, Davy and ML Capital) and through our unit-linked funds, policyholders can choose to invest in a number of funds operated by other investment managers. We believe any investment manager investing on our behalf should have their own engagement policy in place that explains how they are integrating ESG matters into their investment approach and how they manage their interaction with the firms in which they invest. To date, the specific details of that engagement policy has not been a primary consideration when choosing a third party investment manager. However, we will review this in the future as the level of public disclosure on ESG matters increases.

Annual Report 2021

The European Union (Shareholders’ Rights) Regulations, 2020 require institutional investors, including life assurance companies such as Irish Life, to publicly disclose how its engagement policy has been implemented on an annual basis. The majority of Irish Life’s equity investments are managed by our sister company Irish Life Investment Managers (ILIM). On our behalf, ILIM considers a range of Environmental, Social and Governance (ESG) criteria when choosing equities in which we invest and while continuing to hold these equities. ILIM publishes an annual Responsible Investing Update that documents their voting and engagement activity on key sustainably themes and how the services of proxy advisers are used to assist with voting and engagement efforts. This annual report also indicates how ILIM exercised voting rights and other rights attached to shares and, their cooperation with other shareholders.

ILIM have made information available in relation to how they have exercised votes on behalf of Irish Life specifically (Voting | Irish Life Investment Managers (ilim.com)).

A small proportion of the funds we invest on behalf of policyholders is managed by Setanta Asset Management (Setanta). Information in relation to voting activity by Setanta is available on their website http://www.setanta-asset.com/shareholder-rights-directive/.

In addition, through our unit-linked funds, policyholders can choose to invest in a number of funds operated by other investment managers. In the case of these other investment managers, Irish Life buys units in collective investment schemes operated by these fund managers and does not directly hold equities and have control over the voting rights.  We believe any investment manager we choose should have their own, annually updated, engagement policy in place that explains how they are integrating ESG matters into their investment approach and how they manage their interaction with the firms in which they invest.

Investment Strategy

The aim of Irish Life is to invest in matching assets to mitigate the market risks linked to policy liabilities. The majority of our equity investments relate to our unit-linked funds – we invest in appropriate unit-linked assets to match the surrender value of unit-linked policies. In addition, we operate an equity hedge to partially mitigate certain residual exposure to equity risk.

Our Board approved Investment Policy sets out the criteria we use when we invest our assets. Our investment principles include:

  • establishing strategic asset limits to make sure our investments are appropriately diversified;
  • investing in assets and instruments only when we can properly identify, measure, monitor, manage, control and report on their associated risks;
  • limiting the amount of  equities we can hold which are not publicly traded - we have minimal exposure to such equities
  • keeping shareholder investments in equity/property assets low.

Further information on Irish Life’s investment strategy is available in our Solvency and Financial Condition Report (SFCR).