The Dutch Government’s pledge to increase defence spending to 3.5% of GDP by 2025 is already running into difficulty as financial institutions, including insurers, are requesting help in screening defence companies.
According to Reuters, talks initiated by the Dutch Defence Ministry (MoD) began in 2024 with large domestic insurance companies to explore a framework for potential defence investments, but the Dutch Insurers Association said insurers lack the expertise to perform due diligence in the secretive defence sector.
"We need the government for this. Defence is a very untransparent industry for us and the government is the party that has all the context, the information needed to really make a good decision," a spokesperson for the insurers' association said.
The last substantive discussions with the government were held last September and no further talks have been scheduled, the association added.
Dutch insurers had a combined €455bn ($531.44bn) in AUM at the end of March, including pension funds they own such as AZL, and Dutch dentists' fund SPT, according to De Nederlandsche Bank data.
To become significant investors, however, they would need specific information about where a defence company sells to and details of all its products, to comply with their own environmental, social and governance (ESG) policies that prohibit investment in companies producing certain weapons or supplying certain countries, the association spokesperson said.
