Europe

Showing posts with label Europe. Show all posts
Showing posts with label Europe. Show all posts

Tuesday, 30 July 2019

EU insurers suggest improvements to EIOPA paper on sustainability in Solvency II




Insurance Europe has responded to a European Insurance and Occupational Pensions Authority (EIOPA) opinion paper on sustainability in Solvency II. Insurance Europe said that Solvency II is not a barrier to the integration of sustainability and also noted that sustainability risks are already incorporated into the framework.
Insurance Europe warned that the direct incorporation of a uniform quantitative approach into the own risk assessment (ORSA), based on a standardised set of climate change scenarios, would contrast with the very nature of the ORSA, which is company-specific and with a unique time horizon.
With respect to the use of a forward-looking approach, Insurance Europe said that insurers should be given maximum flexibility to use the most suitable tools to deal with sustainability risks in line with their undertakings’ characteristics.
Insurance Europe added that proportionality should be duly considered in any proposed requirements.

Monday, 11 February 2019

Updated tool highlights insurers’ consumer-focused practices across EU



Insurance Europe has published an update to its online consumer focus tool, which outlines examples of the work undertaken by Europe’s insurers to provide innovative products and services for consumers.

The tool, which is available here, provides information through an interactive map of Europe that allows users to click on specific countries to gain insight into insurers’ consumer-focused practices in that particular market.
The tool provides examples of initiatives in several important areas, including:
  • Innovative products and services
  • Digitalisation
  • Enhanced claims management
  • Transparency and financial education
  • Initiatives to fight insurance fraud
The initiatives were developed with specific national features in mind, such as national regulatory frameworks and local consumers’ needs, which — like insurance companies — can differ significantly between EU countries. Insurance products and services are, therefore, not directly transferable from one market to another.

Saturday, 15 December 2018

EIOPA’s stress test confirms strength of the European insurance industry




In response to the results of the 2018 insurance stress test carried out by the European Insurance and Occupational Pensions Authority (EIOPA), Olav Jones, deputy director general of Insurance Europe, commented:
“Insurance Europe is pleased to see that the 2018 stress test exercise confirms the strength of Europe’s insurance industry with a baseline SCR coverage over 200% and Assets over Liabilities (AoL) ratio of 109%. The purpose of this test is to provide information on financial stability under adverse market developments. EIOPA chose in fact very extreme scenarios, for example the yield curve down scenario includes an interest rate which is equivalent to assuming zero European growth for the next 100 years. The results confirm that, even under the very extreme scenarios applied, the industry would pose no concerns over their ability to pay claims, with the overall AoL ratio remaining above 106% for even the worst scenario.”

It is important to recognise that the regulatory framework for the insurance sector, Solvency II, is already a comprehensive risk-based system which sets conservative capital requirements by covering all the risks that insurers are exposed to. These capital requirements are based on stress scenarios applied to assets/liabilities and calibrated with extreme 1-in-200 year type events and are publicly reported. Therefore, the post-stress SCR ratios reported in the stress test represent the impact of an extreme stress on an extreme stress. Even on this basis the industry is shown to be very resilient.

Thursday, 13 December 2018

2018 Solvency II review: EC proposal lacks serious ambition to unlock investment the economy needs



Insurance Europe has raised serious concerns in its response to a consultation by the European Commission on its draft proposals for the 2018 review of the Solvency II Delegated Regulation.
While the industry welcomes the Commission’s aim of simplifying Solvency II and increasing proportionality in its application, the proposals lack ambition in several important areas. Unless the final text is improved, the Commission will miss a key opportunity to remove barriers to long-term investment and to unlock insurers’ capacity to support the growth that Europe’s economy so desperately needs.
The Commission’s proposals for the recalibration of long-term equity and the review of the risk margin – both of which have a significant impact on insurers’ capacity for long-term investments and to support the objectives of the Commission’s Capital Markets Union project – must be more ambitious. While acknowledging the Commission’s recognition that action is needed on long-term equity investments, Insurance Europe warned that the Commission’s technical proposal will not work in practice. It is therefore calling for swift action by the Commission to amend its proposal so that it has the intended impact.
Regarding the risk margin, it should first be noted that this is a conceptual element of Solvency II that, according to the European Insurance and Occupational Pensions Authority, accounts for €200 billion of insurers’ capital and is over and above the amount needed to pay customer claims. There is significant evidence that the 6% cost of capital, a key element of its calibration, is too high. This impacts, in particular, long-term products and investment. If the Commission continues to ignore this evidence and preserve the status quo, it will miss a key opportunity to reduce the current barriers to long-term investment by insurers. While a more complete review of its purpose and design can take place in the 2020 review, a first step is needed and justified now.
Insurance Europe also said the review provides the opportunity to take a first step in improving the design of the volatility adjustment, by refining the trigger mechanism for the application of the country adjustment.
It also raised other concerns, including the need to avoid unnecessary limits on the calculation of loss absorbing capacity of deferred tax (LAC DT), which can be found in its response to the consultation.

Tuesday, 20 November 2018

AMICE calls for a fair and competitive marketplace in Europe




The Association of Mutual Insurers and Insurance Cooperatives in Europe aisbl (AMICE), the voice of the mutual and cooperative insurance sector in Europe, has today highlighted the barriers to cross-border insurance for its members,
Despite forming more than 30% of the European insurance market, there are significant barriers for many mutual and cooperative insurers to actively participate in cross-border insurance activities. With cross-border business being highlighted at EIOPA’s annual conference today in Frankfurt, as well as in the recent report on some of EIOPA’s activities by the European Court of Auditors, AMICE continues to call for all European countries to recognise the mutual model and ensure a balanced approach to supervision and proportionality to maintain diversity in the market and choice for policymakers.
Information contained in AMICE’s recently published Facts & Figures Vol 2 shows the disparity in legislative and regulatory systems in the EU28 and EEA countries, as well as the development of the sector in Europe in the years 2007-2015. Facts & Figures Vol 2 is the biggest longitudinal study of the sector every undertaken.
Sarah Goddard, AMICE Secretary General commented,
She continued,
“Although the European insurance industry in general continues to feel the pressures of a testing business environment, the durability of the mutual and cooperative insurance model has provided a buffer against some of the problems traditionally faced by policyholders when there is a sustained period of challenge. This was clearly illustrated our second edition of the Facts & Figures publication, which showed a substantial increase in market share for our sector in the years of turmoil following the global financial crash a decade ago.”
The full report is available from the AMICE Secretariat or via the AMICE website

Statistical data was sourced and analysed for this report by the International Cooperative and Mutual Insurance Federation (ICMIF). The legal landscape elements of the report were developed through desk research by AMICE, supported by AMICE members, national supervisors, national associations and other trade bodies.