QBE has earmarked $US100 million ($111 million) to invest in social impact bonds over the next three years.

The insurer and NAB are founding corporate sponsors of a strategy to develop the emerging asset class – which links financial returns to the achievement of agreed social outcomes – in Australia.

QBE Chief Investment Officer Gary Brader says the company intends to build a global portfolio of “social impact assets”.

He announced the drive in Sydney last week while launching the Delivering on Impact strategy – a joint private, public and charity sector initiative.

One of Australia’s first social impact bonds, the $7 million UnitingCare New Parent and Infant Network Program, pegs returns to the number of foster children reunited with their families.

It announced a yield of 7.5% in August.

The NSW Government has signalled it will support social impact bonds as a way of delivering community services, while other state governments are reportedly watching developments closely.

Non-profit group Impact Investing Australia says over the next decade the market for impact investments in Australia will be valued at $32 billion, with the global market between $US500 billion and $US1 trillion ($558 billion and $1.2 trillion).

Mr Brader told insuranceNEWS.com.au QBE wants to help develop the asset class.

“The concept and potential of the instrument is so compelling we wanted to be involved. We’re at the very early stages. Impact investing hasn’t achieved scale yet, and that’s partly why we’ve committed $100 million, to get [it] on the radar screen.”

Mr Brader says QBE will work with government and the non-profit sector to develop “the right instruments” to attract institutional investors. “I expect this to be a perfectly normal asset allocation in 10 years’ time,” he said.