Monday, 30 March 2020

European financial services will maintain support for customers, employees and EU economy within governments’ boundaries during COVID-19 pandemic

The European social partners – which include representatives of both financial sector employers and employees, and of which Insurance Europe is a member – will continue supporting their customers and the European economy to the best of their abilities within government-set boundaries during the COVID-19 pandemic.
Employees and employers in the European insurance and banking sectors, as well as insurance and financial intermediaries, are currently doing their utmost to offer essential services within the limits imposed by public authorities and will continue to do so throughout the pandemic as best they can. 
The health and safety of financial services employees, their customers and the general public is paramount. As such, the sector is already taking steps to reduce the risk of transmission, such as limiting face to face meetings with customers and enabling employees to work remotely to minimise contact with other people, while making every effort to provide uninterrupted services to customers.
Close coordination between the financial services sector and policymakers, regulators and supervisors will also be required to minimise the effects of COVID-19 on Europe’s economy as much as possible.
The signatories are:
  • Insurance Europe
  • UNI Europa Finance 
  • The Banking Committee for European Social Affairs of the European Banking Federation (EBF BCESA)
  • The European Savings and Retail Banking Group (ESBG)
  • The European Association of Cooperative Banks (EACB)
  • The Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE)
  • The European Federation of Insurance Intermediaries (BIPAR)

You can read the full statement here.

Monday, 23 March 2020

Policymakers must keep EU financial markets open during COVID-19 pandemic

A group of ten associations representing a wide range of financial services companies, exchanges, funds and consumers – including Insurance Europe – has written to several European and national policymakers to emphasise the importance of keeping European financial markets open during the COVID-19 pandemic.

Financial markets provide critical infrastructure for the European economy. They serve the needs of participants to raise capital, manage investments, access cash and manage risk in ways that affect both retail and institutional investors. These markets are also prepared to withstand the extraordinary volatility and stress under which they are now operating.

However, closing the markets would have a negative impact on the European economy. In fact, even persistent rumours about closing the markets are themselves already causing adverse effects. This is because some market participants are taking steps, which they otherwise would not, to act ahead of a rumoured market closure. 

The signatories therefore call on policymakers to make a joint statement to signal that European financial markets will continue to operate. This is essential to build market confidence and to emphasise that markets are needed most during times of economic uncertainty.

Thursday, 13 February 2020

Major re/insurers and brokers complete complex placements on B3i’s blockchain platform

30 contracts completed on B3i’s platform
B3i Services AG, a 2-year-old company entirely owned by members of the insurance industry, announced that 30 contracts of reinsurance have been concluded on its platform, including some of the world’s most complex Catastrophe Excess of Loss (XoL) reinsurance treaties.
A total of 9 insurers, 4 major brokerage firms, and 8 reinsurers participated in the placements, which were conducted as a parallel run with 1/1/20 renewals or as a re-creation.
B3i, insurers, brokers, and reinsurers have worked collaboratively to set-up distributed ledger technology (DLT) infrastructure, conduct user acceptance testing, and train end users.  The transactions were conducted in B3i’s application, but third parties may build their own applications atop B3i’s APIs while preserving the benefits of distributed ledger technology.

Dr. Silvio Tschudi, Senior Retrocession Manager at Allianz Re, stated: “B3i’s platform shows what’s possible for greatly easing the placement process for all parties involved, and it’s very promising. Working with our brokers and reinsurers during the placement process, across the B3i platform, has shown improved efficiencies and complete contract certainty.”

Alberto Valenti, Head of Group Reinsurance at Generali, stated: “Our company has tested the potential of B3i’s application recreating the placement of the Group Cat programme after the end of the 2020 renewal. Generali has extended the parallel run also to 2 selected intra-group reinsurance Cat programmes observing several potential benefits in adopting the application for the intra-group transactions. Our main brokers and reinsurers have been involved.

In 2020, B3i intends to continue to develop its reinsurance platform to include additional types of reinsurance and modules for technical accounting and claims, thus covering the full lifecycle of a reinsurance contract.  Further, B3i is expanding into large commercial applications.
B3i currently has 20 shareholders, all insurers or reinsurers, from Europe, Asia, North and South America, and Africa.  B3i will conduct a fundraise in 2020 which is open to insurers, brokers, reinsurers, and service providers to the industry.

The reinsurance transactions show that distributed ledger technology will be a powerful solution for insurers, brokers, and reinsurers to grow their business while creating material efficiencies over existing technology.  B3i offers the only DLT-based solution in production and capable of handling reinsurance placements today,” said John Carolin, CEO of B3i.
“We invite all participants in the insurance industry to work with B3i to improve risk transfer using distributed ledger technology - whether by investing and joining our governance, by using the platform for transactions, or by partnering to develop new solutions.”

B3i’s Chairman, Antony Elliot, said, “B3i has always been by the industry, for the industry. Our global shareholders and B3i’s talented team have built the only application that uses distributed ledger technology to facilitate reinsurance placements. B3i looks forward to expanding our engagement with insurers, brokers, and reinsurers to develop the platform’s capabilities further considering reinsurance and commercial insurance use cases.”

Monday, 3 February 2020

EDPB implementation guidelines must be revised to avoid exceeding GDPR and adding unnecessary constraints

Insurance Europe has today published its response to a consultation by the European Commission in preparation for its evaluation and review report on the application of the General Data Protection Regulation (GDPR) of May 2020.

Insurance Europe raised concerns about guidelines from the European Data Protection Body (EDPB). While the guidelines can be useful implementation and compliance tools, they often exceed the requirements established in the GDPR, which in turn creates unjustified additional constraints. Therefore, any EDPB guidelines that go beyond GDPR should be revised in order to be aligned with the Regulation.
EDPB guidelines are also often drafted in a way that requires additional interpretation. This not only defeats the very purpose of the guidelines, but also prevents their direct application. The EDPB should therefore ensure that its guidelines provide appropriate legal clarity and do not leave room for various interpretations. 
Insurance Europe also raised concerns about gold-plating, regarding national guidance papers that have proposed diverging interpretations, for example on ‘legitimate interest’ and data protection impact assessment.

The full response is available here.

Wednesday, 22 January 2020

Serious concerns raised on ESA’s approach to fixing PRIIPS KID

A group of financial associations – including Insurance Europe – has written to the European Commission to warn that the approach being taken to fix problems with the regulatory technical standards (RTS) of the Packaged Retail Investment and Insurance-Based Products (PRIIPs) Regulation is fundamentally flawed and will negatively impact consumers.
The letter sets out the following concerns:
  • Timing — The timing of the European Supervisory Authorities' (ESA) review is unhelpful. While consumer testing is already being carried out by the European Commission to inform the future full review of the PRIIPs Regulation, the ESA’s will not be able to properly take this testing on board when proposing any of their own amendments to the PRIIPS key information document (KID) in the meantime. Moreover, changes to PRIIPs will only be meaningful and effective if they are made as part of the full review of the Regulation, rather than as short-term ‘quick-fixes’.
  • Consumer testing — Any changes to the PRIIPs KID must lead to consumers having a better understanding of insurance-based investment products. It is also important that any new proposals are tested, not in isolation, but as part of the complete information provided to consumers. Given the broad and varied scope of the PRIIPs Regulation, they must also be tested on a significant range of products to ensure they are suitable for all products in all markets.
  • Constant changes — Since its entry into force two years ago, the PRIIPs framework has already been subject to a series of refinements and changes. These create a significant compliance burden for companies and are detrimental to consumer understanding. To avoid further piecemeal changes, there must be a comprehensive assessment of how the PRIIPs KID is received in practice to examine whether there is a need to overhaul the entire document.
  • Ensuring information is meaningful — A ‘one-size-fits-all’ approach will never be able to make the PRIIPs KID work for consumers. The EC and ESAs must instead reconsider the entire PRIIPs framework as part of the official review of the Regulation, and develop solutions that, based on solid evidence, will effectively improve consumer understanding and be workable for all PRIIPs in the different markets.

Thursday, 16 January 2020

AMICE response to Solvency II 2020 Review Consultation

Evolution of Europe’s insurance regulatory environment to benefit policyholders
 The Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE), the voice of the mutual and cooperative insurance sector in Europe, has today responded to the European Insurance and Occupational Pensions Authority’s (EIOPA) call for advice for the 2020 Review of Solvency II. In its response, AMICE welcomed the overall success of Solvency II as a regulatory framework, and agrees with EIOPA that this review should not result in a revolution, but in the adjustment of certain elements. It is important that this is not used as an opportunity to increase the regulatory burden; it is an opportunity to improve the current system in the light of four years’ experience since its implementation in 2016.
 Following a request by the European Commission, EIOPA in October 2019 published an 878-page consultation paper which includes suggestions to update almost all aspects of Solvency II. The consultation comprises 19 separate topics, which can be divided broadly into three parts:
 ▪ the review of the long-term guarantee measures; ▪ the potential introduction of new regulatory tools in the Solvency II Directive; ▪ revisions to the existing Solvency II framework.
 AMICE has highlighted three key areas in its response to EIOPA:
 1) Long-term measures and equity risk 
 This review is an opportunity to reduce procyclicality and rebalance capital requirements for certain investment classes, ensuring that our members can continue to play their vital long-term role in the European economy and that capital can be accessed in line with CMU objectives. AMICE has made several proposals to assist in achieving a proper reflection of the net risk profile of the long-term business model, and issued two position notes with concrete proposals for easy- to-apply fixes for the volatility adjustment (VA) and long-term equity. We are particularly concerned that the VA and extrapolation proposals need to be tackled in line with stakeholders’ interests, as we have detailed in our response.
 2) Macroprudential policies 
 The insurance sector has proven to be resilient in the face of economic challenges. There is little evidence that it contributes to systemic risk, particularly within the mutual sector. With these points in mind, AMICE believes that the regulatory tools within the Solvency II system are ensuring a robust insurance sector and providing appropriate protection for policyholders. In particular, the powerful governance tools, including the ORSA, in Pillar 2 of Solvency II are robust safeguards.
 3) Proportionality 
 Proportionality is embedded in the Solvency II Directive and the Delegated Regulation, but its application has been limited. This has resulted in a disproportionate regulatory burden, particularly for small and medium-sized insurers (many of which are mutuals), which does not properly reflect their risk profile or provide commensurate policyholder protection. AMICE supports proposals to increase the thresholds at which Solvency II applies to small insurers, to apply an appropriately calibrated regime for medium-sized insurers, and to ensure that the principle of proportionality works consistently in practice. AMICE has focused on proportionality within Solvency II for many years, and recently has made detailed submissions for practical solutions such as a regulatory “toolbox”.

 The highly technical topics presented in the EOIPA consultation have been discussed intensely by AMICEand its members prior to its collective response, which was submitted earlier today.
 The AMICE membership notes that while it supports the overarching principles of Solvency II - to ensure that EU policyholders enjoy the same level of protection regardless of where they buy insurance - the current regulation presents some shortcomings for the mutual and co-operative insurance sector. Since the introduction of Solvency II, mutual and co-operative insurers have called for a considered and proportional approach to its evolution.
 In its response to the call for advice for the 2020 review of Solvency II, AMICE recognises that some technical corrections are necessary, but also highlights that:
▪ progress should follow a principle-based regime: supervisory convergence should not lead to more legislation, and should deliver simplification of existing rules wherever possible, not result in unnecessary and overly burdensome complication. A measured approach to the introduction of new tools should be applied, particularly where existing tools are already fit for purpose, or still being developed;
 ▪ changes should not assume a ‘one size fits all’ approach.
While market consistency is desirable, regulatory reform should be appropriate, representative, responsive and proportional; and
 ▪ the cost of change is ultimately borne by the policyholder. The administrative burden of the proposed changes will be significant, and the impact of further regulatory reform should be taken into account.
 AMICE’s Secretary General, Sarah Goddard, commented:
 “Historically, AMICE has been deeply involved in the consultation around the development of Solvency II, particularly the implementation of the proportionality principle. Proportionality is particularly important for the mutual and co-operative insurance sector, alongside more technical aspects such as long-term equity, the volatility adjustment and interest rate risk. We have highlighted these issues in our response to the Solvency II 2020 Review consultation.” She continued, “This review is an important programme in ensuring that the European regulatory system works the way it should do, including fair treatment of all insurers, and AMICE has worked with members across Europe to ensure they are fully represented and their views appropriately reflected in our response. We look forward to a positive and ongoing dialogue with EIOPA and other stakeholders on regulatory reform.”

Didem Ozsoy Dirican appointed CEO NN Hayat ve Emeklilik in Turkey on an ad interim basis

As of 1 February 2020, Didem Ozsoy Dirican, currently Chief Commercial Officer of NN Hayat ve Emeklilik, will be appointed CEO NN Hayat ve Emeklilik on an ad interim basis and subject to regulatory approval. This follows, Marius Popescu’s appointment as Head of Performance and Analytics within NN Group as of the same date.
Didem joined NN Hayat ve Emeklilik in 2013 as Strategy and Business Development Manager. She held various roles including Chief Bancassurance and Corporate Sales and most recently, Chief Commercial Officer. Prior to joining NN Group, Didem held senior commercial roles in Aviva and AK Emeklilik in Istanbul.

NN in Turkey

NN has had a market presence in Turkey since 2009 and offers mandatory and voluntary pensions, life and health insurance. Sigorta Cini is our insurance retail broker for the Turkish market.

Monday, 13 January 2020

ESAs proposals on PRIIPs: going from bad to worse

Insurance Europe has serious concerns about the review currently being undertaken of the Packaged Retail Investment and Insurance-based Products (PRIIPs) Regulatory Technical Standards (RTS). Proposals put forward in a consultation by the Joint Committee of the European Supervisory Authorities (ESAs) on changes to the PRIIPS RTS would make things worse for both consumers and insurers.
Rather than improve the quality of information in the PRIIPs Key Information Document (KID) — which is intended to inform consumers about insurance-based investment products (IBIPs) — the proposals would:
  • Increase the complexity of the methods and presentation of information, making it even more difficult for consumers to understand.
  • Lead to misleading figures being given to consumers.
  • In general, overload consumers with information.
Insurance Europe also has serious concerns about the “quick-fix” approach taken in the ESAs’ consultation. It is vital that any new measures address the underlying problems with the PRIIPs KID and do not attempt to find superficial and ineffective solutions.
The ESAs therefore must conduct a more well-considered and better evidenced approach when proposing amendments. It needs to be clearly demonstrated that consumers will benefit from any alterations, given the significant compliance costs those changes will impose on insurers.
Fundamental changes that are required to address flaws in the PRIIPs KID should therefore only be considered as part of the official overall review foreseen by the PRIIPs Regulation. Such amendments require a thorough impact assessment and proper, holistic consumer testing of all aspects of the KID, to ensure that consumers are provided with meaningful information.
Insurance Europe’s other concerns include:
  • The introduction of any interim measures must be avoided, as they would incur additional compliance costs without achieving any added value for consumers. Repeatedly changing the presentation and the contents of the PRIIPs KID only confuses consumers and undermines their trust in the PRIIPs KID.
  • Proposals to integrate more features from the UCITS key investor information document (KIID) into the PRIIPs KID, would make it even less suitable for IBIPs, and even more confusing for consumers. IBIPs represent around 80% of the current PRIIPs market, and the PRIIPs KID must therefore be fit for insurance products.
  • Proposed changes for multi-option products (MOPs) would be particularly burdensome for insurers to implement and not add any value for consumers. On the contrary, the introduction of additional layers of information, including cross-references, and complex costs tables for MOPs would confuse consumers and expose insurers to significant liability risks.
The full response to the consultation is available here.

Thursday, 9 January 2020

Munich Re:Tropical cyclones causing billions in losses dominate nat cat picture of 2019

  • Severe typhoons in Japan cause the year’s biggest losses
  • Hurricane Dorian, the strongest hurricane of the year, devastates the Bahamas – US mainland largely spared
  • Natural catastrophes cause overall losses of US$ 150bn, with insured losses of about US$ 52bn – In line with long-term average
  • Humanitarian tragedy caused by cyclones in Mozambique – Over 1,000 deaths – Better protection is urgently needed
  • The 2019 natural catastrophe year at a glance

    820 natural catastrophes caused overall losses of US$ 150bn, which is broadly in line with the inflation-adjusted average of the past 30 years. A smaller portion of losses was insured compared with 2018: about US$ 52bn. This was due, among other things, to the high share of flood losses, which are often not insured to the same extent as wind damage in most industrial countries.
    The insured portion of overall losses, slightly above 35%, matches the average of the past ten years. This is evidence that large sections of the market remain uninsured, especially in emerging and developing countries.
    Globally, in 2019, about 9,000 people lost their lives in natural catastrophes compared with 15,000 in 2018. This confirms the overall trend towards lower numbers of victims thanks to better prevention measures. On average over the past 30 years, about 52,000 people per year have lost their lives in natural catastrophes.
  • " The severe cyclones in 2019 have highlighted the importance of knowledge about changes in risk. Natural climate variations influence weather catastrophes from year to year. Longer-term climate change effects can already be felt and seen. Buildings and infrastructure must be made more resistant in order to reverse the increasing trend in losses. This will enable insurance to be more effective and support the remaining financial losses. 
    Torsten Jeworrek
    Member of the Board of Management