Showing posts with label European insurance. Show all posts

Wednesday, 12 June 2019

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Insurers ask if GDPR has delivered on its aims



Insurance Europe has published an insight briefing that examines whether the General Data Protection Regulation (GDPR) has delivered on its aims of enhanced protection and greater harmonisation of data protection rules. It also asks if the GDPR is compatible with insurers’ need to innovate for the benefit consumers.
The European Commission is currently taking stock of stakeholders’ experiences of implementing the GDPR to prepare its report on the evaluation and review of the Regulation, due by May 2020. The briefing has been published ahead of a Commission event on the GDPR’s anniversary which takes place on 13 June.
The briefing highlights the positive effects that the introduction of new rights has had on consumers and how this helps insurers to build and maintain trustworthy relationships with consumers.
Importantly, the document notes that the GDPR has not fully achieved the level of harmonisation that was initially intended. While the GDPR has secured the same level of protection for consumers in all EU member states to a certain degree, it is not always applied uniformly across member states.
The briefing also highlights how — despite significant efforts to modernise privacy rules — the GDPR and the guidelines adopted by the European Data Protection Board (EDPB) introduce, in some instances, requirements that are at odds with fast-evolving technology and that may slow the pace of insurers’ digital innovation.
Looking ahead, it will be crucial for the Commission to ensure that the application of the GDPR and its guidelines allow insurers to continue operating cross border and guarantee the safe development and introduction of innovative products that can benefit consumers. 

Sunday, 7 April 2019

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EU recognition of role of personal pensions in closing savings gap positive, but whether PEPP will increase pension savings unclear


In response to the adoption today of the Regulation introducing a pan-European personal pension product (PEPP) by the European Parliament, Nicolas Jeanmart, head of personal insurance, general insurance & macroeconomics of Insurance Europe, commented:
“By developing the PEPP, the EU has taken a step towards creating a regulatory environment that recognises the importance of personal pensions and the key role they can play in our society. In a landscape increasingly challenged by rapidly ageing populations, it is crucial that policymakers acknowledge the potential of personal pensions in increasing pension savings.
“It is too early to predict whether consumers will be interested in purchasing a PEPP, so its impact on individual pension savings’ levels across Europe is not yet known. A decisive factor will undoubtedly be the Level II technical measures where many key product features will be decided. That is why the work of the European Insurance and Occupational Pensions Authority (EIOPA) throughout the coming year will be crucial in addressing the remaining open questions, and we stand ready to contribute.
“For example, when defining risk mitigation techniques, it is very important to ensure that the money invested by savers is equally protected irrespective of the type of PEPP provider. It is also vital that capital requirements accurately reflect the risks related to long-term savings products and do not exaggerate them; otherwise PEPPs will be unnecessarily expensive or limited in terms of the guarantees that can be offered to protect customers’ retirement savings.”

Tuesday, 26 March 2019

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EU insurers publish no-deal Brexit check list


Insurance Europe has today published a check list regarding the insurance implications of a no-deal Brexit.

The checklist includes:
  • Motor insurance - Currently, motorists insured in any EU member state can drive their vehicle in any other EU member state. However, as no agreement has been reached to continue this in the case of a no-deal Brexit, both UK and EU motorists should check with their insurance provider to see whether they need a Green Card.
  • Health insurance - Currently, EU residents travelling within the EU can request a European Health Insurance Card (EHIC) that provides access to healthcare in other EU countries. However, in the case of a no-deal Brexit, EHIC cards will not be officially recognised by the UK for EU travellers or vice-versa. Therefore, travellers must ensure they have adequate travel or health insurance to cover any health services needed while travelling.
  • Travel insurance - If there is a no-deal Brexit, while travellers from the UK to the EU should still be covered by EU or EEA region policies (with the possible exception of medical expenses covered by the EHIC), both they and EU travellers to the UK should check that their policies cover their destination before they travel.
Further information and advice can be found online for the EU27 and for the UK.

Friday, 14 December 2018

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EIOPA announces results of the 2018 Insurance Stress Test


The European Insurance and Occupational Pensions Authority (EIOPA) published today the results of its 2018 and fourth Stress Test for the European insurance sector. This year's exercise assessed the participating insurers' resilience to the following three severe but plausible scenarios:

  • A yield curve up shock combined with lapse and provisions deficiency shocks, which means there is a sudden and sizeable repricing of risk premia and a significant increase in claims inflation.
  • A yield curve down shock combined with longevity stress, which means there is a protracted period of extremely low interest rates accompanied by an increase in the life expectancy.
  • A series of natural catastrophes where European countries are hit in a quick succession of four windstorms, two floods and two earthquakes.
In this year's exercise 42 European (re)insurance groups participated representing a market coverage of around 75 % based on total consolidate assets. The reference date was 31 December 2017.
The impact of the different scenarios on the balance sheet position and on the capital position of the participating groups was assessed by the excess of Assets over Liabilities and an estimation of the post-stress Solvency Capital Requirement (SCR) ratio. Given the operational and methodological challenges related to the recalculation of the group SCR, participating groups were allowed to use approximations and simplifications as long as a fair reflection of the direction and magnitude of the impact was warranted.
In the pre-stress (baseline) situation, participants reported an aggregate Assets over Liabilities (AoL) ratio of 109.5 % and a pre-stress SCR coverage of 202.4 %.
Overall, the exercise confirmed the significant sensitivity to market shocks combined with specific shocks relevant for the European insurance sector. On aggregate, the sector is adequately capitalised to absorb the prescribed shocks.
In the 'yield curve up' scenario, the excess of assets over liabilities is reduced by approximately one third (-32.2 %) and the aggregate post-stress SCR ratio drops to 145.2 %. Six groups reported a post-stress SCR ratio below 100 %.
In the 'yield curve down' scenario, the impact on the excess of assets over liabilities is of similar magnitude (-27.6 %) with an aggregate post-stress SCR ratio of 137.4 %.  Seven groups reported a post-stress SCR ratio below 100 %.
In the natural catastrophe scenario only a small decrease of 0.3 percentage points of assets over liabilities ratio was reported. Overall, the participating groups demonstrate a high resilience to the series of natural catastrophes tested, showing the importance of the risk transfer mechanisms in place, namely reinsurance, which absorbed 55 % of the losses. Consequently, the most affected groups are reinsurers and those direct insurers largely involved in reinsurance activities.
One of the objectives of this year's exercise, in line with the recent recommendations from the European Court of Auditors, was to increase transparency by requesting the voluntary disclosure of a list of individual stress test indicators by the participating groups. To date, four of the 42 participating groups provided consent to the publication of the individual results.
Gabriel Bernardino, Chairman of EIOPA said: "This stress test marks an important step forward in assessing the resilience of the European insurance sector to a set of adverse but plausible scenarios and provides a valuable basis for a continuous dialogue with the participating groups on the identified vulnerabilities and the preventive measures and potential management actions to address them, should they materialise."

Friday, 30 November 2018

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EIOPA consults on the integration of sustainability risks and factors


European Insurance and Occupational Pensions Authority (EIOPA) published for consultation its draft technical advice on possible amendments to the delegated acts under Solvency II and the Insurance Distribution Directive (IDD) concerning the integration of sustainability risks and factors.
The proposed draft amendments to the Solvency II Delegated Regulation are aimed to ensure identification and assessment of sustainability risks in the areas of underwriting and investments. Insurance undertakings shall take into account the potential long-term impact of investment decisions on sustainability factors (stewardship principle) and where relevant reflect policyholders' Environmental, Social and Governance (ESG) preferences.
The proposed draft amendments under the IDD relate to the following two areas:
  • Conflicts of interest: When identifying the types of conflicts of interest which might damage the interests of a customer, insurance undertakings and insurance intermediaries should include those that potentially may arise in relation to sustainability. Insurance undertakings and insurance intermediaries should have in place appropriate arrangements to ensure that ESG considerations are included in the advisory process and do not lead to mis-selling practices.
  • Product Oversight & Governance: Customers' ESG preferences in the target market shall be considered in various stages of product lifecycle in case the insurance product is offered to customers seeking insurance products with an ESG profile.
On 1 August 2018, EIOPA received a request from the European Commission to provide technical advice on potential amendments to or introduction of delegated acts under the Solvency II Directive and IDD with regard to the integration of sustainability risks and sustainability factors. This Call for Advice refers particularly to the following areas:
  • Organisational requirements
  • Operating conditions
  • Risk management
  • Target market assessment for the IDD only
EIOPA is seeking stakeholders comments on the draft technical advice developed on the basis of the following three principles:
  • Coherence with current requirements
  • Proportionality
  • Cross-sectoral consistency
The draft technical advice can be obtained via EIOPA's Website.
Stakeholders are invited to provide their comments by Wednesday, 30 January 2019 responding to the survey questions accessible via this link.

Thursday, 29 November 2018

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Timid 2018 Solvency II review has missed opportunity for progress on CMU


In response to the European Commission’s update yesterday on the progress of its Capital Markets Union (CMU) project, Olav Jones, deputy director general of Insurance Europe, commented:
“As the EU’s largest institutional investors, Europe’s insurers have always supported the aim of the European Commission’s Capital Markets Union (CMU) project to unlock capital around Europe. However, while some progress has undoubtedly been made, several points remain to be addressed.
“On the review of insurers’ Solvency II regulatory framework, we feel that the EC is really missing an opportunity to unlock capital that insurers could be using to boost Europe’s economy.”
One of the aims of the CMU is to address regulatory barriers to investment, including prudential issues under Solvency II that prevent more long-term investment by the insurance industry.
“Some welcome improvements have been made with respect to the treatment of STS securitisations and infrastructure, but more action is needed and possible,” said Jones. “Several important aspects — equity, the risk margin, the volatility adjustment and the loss absorbing capacity of deferred taxes (LAC DT) — are not being appropriately addressed in the 2018 Solvency II review.”
In its CMU progress report, the European Commission refers to adjustments it has proposed to insurers’ investment in equity. Unfortunately, the draft EC proposal currently being consulted on as part of the Solvency II Delegated Acts in this area would not achieve its aim of unlocking investment, as the way it is designed makes it unlikely any insurer would qualify for the calibration.
The insurance industry strongly believes that this lack of effective action by the Commission is a missed opportunity. The unnecessarily high capital requirements for insurers’ long-term equity need to be reviewed to reflect the true long-term risk exposure of this asset class.

Wednesday, 31 October 2018

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First 2017 European insurance stats published



Insurance Europe has published “European Insurance — Key Facts”, which contains provisional 2017 data for the European insurance industry. European insurers generate premium income of more than €1 200bn, directly employ over 950 000 people and invest over €10 100bn in the economy.
The booklet provides data on premiums and claims by business line and on insurers’ investment portfolio. It also includes figures for insurance penetration, average insurance premiums per capita and claims per capita, at both European and national level.
The booklet is available here.