Showing posts with label Insurance. Show all posts

Monday, 11 February 2019

thumbnail

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

thumbnail

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

thumbnail

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

thumbnail

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.

Friday, 16 November 2018

thumbnail

EIOPA assesses supervisory practices and application of key functions through peer review




  • This peer review assessed how National Competent Authorities (NCAs) supervise and determine the application of the key functions by the insurer with particular emphasis on proportionality
  • In general NCAs apply the principle of proportionality
  • Some weaknesses exist, leading to recommended actions to 18 NCAs in 8 different areas of supervisory approaches
  • For the first time, the findings are published on a named basis
European Insurance and Occupational Pensions Authority (EIOPA) published the findings of its  peer review assessing how National Competent Authorities (NCAs) supervise and determine whether an insurer's set­ting of key functions fulfils the legal requirements of Solvency II with a particular emphasis on proportionality.
The review examines practices regarding:
  • combining key functions under one holder;
  • combining key functions with administrative, management or supervisory body (AMSB) member­ship or with carrying out operational tasks;
  • subordination of one key function under another key function;
  • split of one key function among several holders;
  • assessment of the fitness of key function holders; and
  • outsourcing of key functions.
Key functions (risk management, actuarial, compliance and internal audit) are an essential part of a good system of governance under Solvency II, and, are expected to be operationally independent to ensure effective internal control. Given that the implementation of the governance requirements should reflect the natural scale of complexity of the risks run by the insurers, NCAs should apply the principle of proportionality in relation to the compliance with key function holder requirements.
The report includes findings from a comparative analysis of the key functions, identifies best practices and presents an overview of recommended actions addressed to the NCAs and EIOPA.
Overall, NCAs have adopted similar approaches in assessing how insurers manage key functions and applied the principle of proportionality in their assessment. Four best practices have been identified, providing guidance to NCAs for a more systematic approach regarding the principle of proportionality as well as for ensuring consistent and effective supervisory approaches.
The report also identifies some weaknesses, resulting in a number of recommended actions issued to NCAs. Some NCAs had not yet assessed key functions according to the Solvency II requirements. Other NCAs had weaknesses, in particular regarding the depth assessment and mitigating measures demanded from insurers for example in cases where combinations exist. The areas of recommended actions are linked with the supervisory approach of NCAs, the different combinations of key function holders including the internal audit function and AMSB membership as well as the fitness of the key function holders and outsourcing. 
In line with the recently updated methodology, for the first time, the peer review findings are published in full and on a named basis.
As a result of this peer review, many NCAs have already undertaken actions to improve supervisory practices. These improvements will be taken into consideration in the follow-up to this review.
Gabriel Bernardino, Chairman of EIOPA, said: "The results of this peer review demonstrate the effective approach of national competent authorities in applying the principle of proportionality in their assessment of key functions. Through the implementation of the recommended actions consistent approaches among supervisory authorities will be further enhanced. I particularly welcome the increased transparency through the publication of the findings on a named basis. In being open about their activities, including where improvements can be made, the supervisory community is strengthening the foundations of supervisory convergence."
A shorter Executive Summary, the full report and the methodology applied in the conduct of the peer review can be obtained via EIOPA's Website.

Thursday, 25 October 2018

thumbnail

Better Regulation Agenda: EC failing to take account of stakeholder input


While Insurance Europe supports the European Commission’s “Better Regulation” agenda and its objectives to improve internal processes and stakeholder consultations, it has warned that in many cases stakeholders are not given enough time to provide input and that policymakers do not allow themselves enough time to properly analyse that input and take it on board.
In its response to the Commission’s consultation on its stocktaking of the 'Better Regulation" approach, Insurance Europe acknowledges that important steps have been taken to increase the transparency of EU decision-making by allowing stakeholders the possibility to provide input on draft legislative initiatives. These include the “Have your say” portal, stakeholder consultations and public hearings.
However, Insurance Europe points to examples where stakeholder input is sought with a short timeframe or late in the legislative process, rendering the input useless. Moreover, the Commission should place more emphasis on justifying the need for legislative acts and on assessing the cumulative impact of planned legislation. This includes better consideration of the principles of subsidiarity and proportionality when policies are developed.  
Key recommendations for improving the Commission’s "Better Regulation" approach can be found here.

Tuesday, 9 October 2018

thumbnail

Joint guide aims to help organisations discuss cyber insurance needs with insurers and intermediaries



A group of European industry bodies — BIPAR, FERMA and Insurance Europe, in association with Aon and Marsh — has published a guide to help organisations understand their cyber risks and potential need for cyber insurance.
The guide “Preparing for cyber insurance” outlines how organisations with an interest in accessing cyber insurance can best prepare for discussions with insurance intermediaries and insurers. It also provides tools to help organisations evaluate cyber insurance offers and how they may translate in practice.
Jo Willaert, President of FERMA: “This guide is the first of its kind, and is a joint effort by risk managers, insurers and intermediaries to help organisations effectively discuss their cyber insurance needs. Our ambition is to support insurance buyers in selecting the insurance solutions that are the best adapted to their needs.”

While recent cyber events have made organisations much more aware of the cyber risks they face and more conscious of the need to manage their cybersecurity exposure, many companies still struggle to translate their cybersecurity concerns into concrete action.
Cyber insurance is part of a range of options available to organisations to build up their cybersecurity and resilience. The solutions typically offered by insurers do not only include insurance coverage, but also prevention advice and mitigation support in the event of a cyber-related incident.
Michaela Koller, Director General of Insurance Europe: “There are various tools available to enhance an organisation’s resilience, of which cyber insurance is one. We hope this guide will help organisations to decide the level of protection they require.”
Ulrich Zander, Chair of BIPAR: “In the cyber risk and cyber insurance market, which is a new and quickly changing environment, this brochure gives a general indication of the complexity and provides a starting point for a good dialogue about how insurance intermediaries can assist clients in this specific area.”
Onno Janssen, Aon’s Chief Executive Officer of Risk Consulting & Cyber Solutions EMEA: “The growing cyber threat and its potential impact continues to generate concern in boardrooms, with the need for leaders across business functions to take an enterprise-wide approach to cyber risk. Organisations should make an informed decision when considering cyber insurance, and how it responds to their cyber risk scenarios, so that they can prepare for, and mitigate against a cyber incident.”
Flavio Piccolomini, President Marsh International: “Policymakers, businesses and the insurance industry each have a role in helping society deal with the challenges of a rapidly evolving cyber risk landscape. Within the insurance industry, we need to improve information sharing about the added value of cyber insurance. Marsh welcomes initiatives that contribute to a more cyber resilient Europe.”
The guide, which has been published to coincide with EU cybersecurity month and was launched today at the 2018 European Risk Management Seminar in Antwerp, is availablehere.

For editors:
The Federation of European Risk Management Associations (FERMA) brings together 22 risk management associations in 21 European countries, representing more than 4700 risk managers active in a wide range of organisations. FERMA provides the means of coordinating risk management and optimising the impact of these associations outside their national boundaries on a European level. www.ferma.eu
Media contact: Typhaine Beaupérin, CEO FERMA
Tel: +32 2 761 94 31
Email: typhaine.beauperin@ferma.eu
Insurance Europe is the European insurance and reinsurance federation. Through its 35 member bodies — the national insurance associations — Insurance Europe represents all types of insurance and reinsurance undertakings, eg pan-European companies, monoliners, mutuals and SMEs.
Insurance Europe, which is based in Brussels, represents undertakings that account for around 95% of total European premium income. Insurance makes a major contribution to Europe’s economic growth and development. European insurers generate premium income of €1 200bn, directly employ over 940 000 people and invest over €10 100bn in the economy.
Media contact: Richard Mackillican, Policy advisor, PR and communications
Tel: +32 2 894 30 69
Email: mackillican@insuranceeurope.eu
BIPAR is the European Federation of Insurance Intermediaries. It groups 53 national associations in 30 countries. Through its national associations, BIPAR represents the interests of insurance agents and brokers and financial intermediaries in Europe. WWW.BIPAR.EU
Media contact: Nic De Maesschalck, BIPAR Director
Email: bipar@bipar.eu
Aon Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. Follow Aon on TwitterLinkedIn and sign up for News Alerts
Media contact: Carrie Leach, Marketing & Communications EMEA
Tel: +44 (0) 20 7086 3093
Email: carrie.leach@aon.co.uk
MARSH A global leader in insurance broking and innovative risk management solutions, Marsh’s 30,000 colleagues advise individual and commercial clients of all sizes in over 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With annual revenue over US$14 billion and nearly 65,000 colleagues worldwide, MMC helps clients navigate an increasingly dynamic and complex environment through four market-leading firms. In addition to Marsh, MMC is the parent company of Guy CarpenterMercer, and Oliver Wyman. Follow Marsh on Twitter @MarshGlobalLinkedInFacebook; and YouTubeor subscribe to BRINK.

Media contact: Jason Groves, Global Director of External Affairs
Tel: +44 (0) 20 7357 1455
Email: jason.groves@marsh.com

Monday, 13 August 2018

thumbnail

Insurers welcome InvestEU proposal to increase supply of suitable long-term investments



Insurance Europe has published its response to the European Commission’s consultation on its proposed InvestEU programme, which aims to bring together various EU financial instruments and expand the Investment Plan for Europe.
The availability of a wide range of investment assets is key to meet insurers’ investment needs. The InvestEU programme has the potential to address the investment gap in the EU and to stimulate additional long-term viable assets that insurers can invest in. It is key that public support is provided only when actually needed, and intervention by national/multilateral development banks should not create the unintended effect of crowding out private investment.
At the same time, it is equally important for the prudential rules defined in Solvency II, which play a key role in investment decision making, to correctly reflect the risks and economics of the business. Action is needed now to remove unnecessary barriers to long-term investments and ensure the natural and significant role of the insurance industry in the InvestEU initiative. Important first steps can be taken in the Solvency II 2018 review and completed in the wider 2020 review.

Wednesday, 18 July 2018

thumbnail

EIOPA examines causes of insurers’ failures and near misses



Today, the European Insurance and Occupational Pensions Authority (EIOPA) published a report on "Failures and near misses in insurance: Overview of the causes and early identification" to enhance the understanding of the causes of insurers' failures and near misses.
The financial crisis put a substantial amount of insurance undertakings and groups under severe financial distress. Although the majority of troubled in­stitutions were banks, several insurers were also affected. Among other rea­sons, this was attributable to inappro­priate investment decisions by insur­ers, which led to significant losses, the interconnectedness with banks or, in general, evidence of poor governance.
This report is the first of a series aimed at enhancing supervisory knowledge of the prevention and management of insurance failures.  The findings are based on information contained in EIOPA's database of failures and near misses. The database was commenced in 2014, covering the period from 1999 to 2016 and gathering sample data of 180 affected insurance undertakings in 31 European countries.
In the first part of the report the framework underlying the concepts of "failure" and "near miss" and the construction process of EIOPA's database are explained, followed by an overview of the stylised facts and statistics. The focus of the report is, however, the examination of the causes of failure in insurance, as well as the assessment of the reported early identification signals.
The report is available via EIOPA's Website.
thumbnail

EIOPA launches EU-wide thematic review on consumer protection issues in travel insurance



European Union-wide thematic review seeks to identify:
 Potential sources of consumer detriment in travel insurance
 How new business models, in particular, in distribution, impact consumers and the travel insurance industry
 Possible supervisory and regulatory actions needed to ensure consumer protection
 Best practices to provide guidance to insurance undertakings in implementing national provisions of the Insurance Distribution Directive (IDD) for the distribution of travel insurance as well as other types of insurance products

European Insurance and Occupational Pensions Authority (EIOPA) launched a thematic review on consumer protection issues in travel insurance. The purpose of the review is to identify consumer protection issues in travel insurance and possible actions to ensure better consumer protection.

Through the review, EIOPA will assess potential sources of consumer detriment stemming from how travel insurance products are designed, distributed and sold within the European Union. In particular, EIOPA will consider the impact of emerging distribution and business models on consumers and, more broadly, on the insurance industry.
Where the impact results in consumer detriment, EIOPA intends to identify the steps needed to ensure that consumers are treated fairly. Given that travel insurance is frequently sold through cross -selling as an ancillary product, EIOPA will pay special attention to these distribution practices.
The aim is to identify best practices to provide guidance to insurance undertakings in implementing  national provisions of the Insurance Distribution Directive (IDD) for the distribution of travel insurance as well as other types of insurance products.
The thematic review will be conducted in close cooperation with national competent authorities (NCAs) that will identify and gather data from participating insurance companies. EIOPA plans to publish the key findings from the review in the first quarter of 2019.
Gabriel Bernardino, Chairman of EIOPA, said: “Travel insurance has too often been under the spotlight with the persistent appearance of a number of consumer protection issues. This review will enable us to gain a deeper understanding of the reasons leading to potential consumer detriment and to identify the required actions that will better protect consumers.” The questionnaire circulated by the NCAs to a representative sample of insurance undertakings can be viewed via EIOPA’s website.

Monday, 9 July 2018

thumbnail

EIOPA SEEKS EVIDENCE ON THE USE OF BIG DATA



A European Union-wide thematic review will
 analyse the potential benefits and risks of Big Data in motor and health insurance
 assess new business models and data quality issues arising from Big Data including implications for consumers
 enhance the understanding of new types and sources of data and data analytics tools used by insurance undertakings and intermediaries
  identify possible required supervisory and regulatory actions

Frankfurt, 06 July 2018 – Today, the European Insurance and Occupational Pensions Authority (EIOPA) launched a European Union-wide thematic review on Big Data as a follow-up to the European Supervisory Authorities’ cross-sectorial review of the use of Big Data published in March this year. The purpose of the thematic review is to gather empirical evidence on the use of Big Data by insurance undertakings and intermediaries along the whole insurance value chain, i.e. in pricing and underwriting, in product development, in claims management, as well as in sales and marketing. The review specifically focuses on the motor and health insurance markets. The review will analyse the potential benefits and risks arising from Big Data both for the industry and for consumers. In particular, it will assess new business models and data quality issues as well as impacts on financial inclusion and the fair treatment of consumers through consumer profiling techniques and more granular risk assesments.
The thematic review will collect information on new types and sources of data as well as the increasingly sophisticated data analytics tools used by insurance undertakings and intermediaries. The thematic review will be conducted in close cooperation with the National Competent Authorities (NCAs) aiming at a coverage of at least 60 % of the motor and health insurance markets in each Member State. The quantitative and qualitative input will be collected from the insurance industry, consumer associations and NCAs. EIOPA will collect the data in the course of July and August this year and plans to publish the key findings in the first quarter of 2019. Gabriel Bernardino, Chairman of EIOPA said: “Big Data has the potential to bring many benefits, both for the industry and for consumers. At the same time, also new challenges and risks are arising. In the interest of the European consumers, evidence about the implications of Big Data is needed. This review will provide a thorough analysis of the impact of Big Data on consumers and the insurance industry and determine possible required supervisory and regulatory actions.” The questionnaires that EIOPA is circulating to NCAs, consumer associations and a representative sample of insurance undertakings, can be viewed via EIOPA’s Website.

Tuesday, 3 July 2018

thumbnail

Insurance Europe:Overview of consumers’ rights under GDPR


Insurance Europe has today published an overview of insurance consumers’ main rights under the General Data Protection Regulation (GDPR), which applied from 25 May 2018. 
The GDPR grants consumers more control over their data, by both reinforcing their existing rights and introducing new ones.
For instance, consumers have the right to transmit their data to another company in a commonly used and machine-readable format, and have the right to know whether their insurer processes their personal data and for which purposes.
The full overview is available here.

Friday, 29 June 2018

thumbnail

Survey shows Solvency II brings benefits but deters long-term business



2018 and 2020 reviews should address regulation’s overly conservative nature

A survey of insurers from across Europe has shown that over three quarters of the respondents have seen a positive effect from the EU’s 2016 Solvency II regulation on their risk management and governance practices and on their management of assets and liabilities.
However, 58% of the respondents offering long-term savings products with guarantees said that Solvency II has had a negative effect on those products. And 48% said that Solvency II has led them to invest less than optimum amounts in equities, long-term bonds, private placements or unrated debt.
The findings provide further evidence that insurers are under pressure to shift risk to customers and to withdraw from long-term guaranteed savings products and that Solvency II is affecting the ability of insurers to invest long-term in the economy at a time when the European Commission is seeking to boost sustainable EU growth.
At a conference in Brussels today, Insurance Europe president Andreas Brandstetter, CEO and chairman of UNIQA Insurance Group, said the results of the federation’s survey backed up insurers’ calls for improvements to be made to Solvency II.
“The European Commission’s 2020 review of Solvency II must address the regulation’s overly conservative nature and the fact that it treats insurers as if they were short-term traders when they are, in fact, mostly long-term investors,” Brandstetter said.
Expressing the insurance industry’s firm support for the sophisticated, risk-based Solvency II regime, Brandstetter welcomed the improvements the European Commission has already made to the framework by recognising infrastructure investment as a separate asset class and by removing barriers to standardised transparent securitisations.
He called for further issues to be addressed in the current, 2018 Solvency II review. These include reducing the cost of capital in the risk margin, which requires all insurers to set aside extra capital that in practice may only be needed in the very rare cases when there is a failure. Brandstetter said that the Solvency II risk margin currently removes over €200bn of capital from insurers’ balance sheets, which could instead be put to productive use.
He also called for a reduction in the calibration of long-term equity investments, which are currently based on trading risk and create a barrier to greater investment.
Further information and background
• Insurance Europe’s survey was carried out in May 2018 and covered 87 insurers from 17 EU markets.
• Its key messages on the 2018 Solvency II review are available here.
• Its Solvency II Conference, “Two years on and two reviews”, is taking place today in Brussels. Click here for the full programme.
• The EU’s (re)insurers have been governed by the Solvency II regulatory regime since January 2016. Two major reviews were built into the Directive: one due by the end of 2018 focusing on simplifications and fixing technical issues and one due by the end of 2020 allowing for broader, more fundamental changes.
thumbnail

EC collective redress proposal: key messages


On 21 June 2018, Insurance Europe cautioned against the adoption of the proposal made by the European Commission on representative actions in consumers’ collective redress as part of its “New Deal for Consumers”.
The reasons for the caution include that the proposal fails to follow the EC’s own 2013 recommendations on collective redress and consequently creates an imbalance between consumers and defendant companies. It is being put forward before member states’ collective redress mechanisms have had time to be evaluated and the actual need for it is therefore unclear. Furthermore, consumers’ fundamental rights to choose whether to be affected by civil procedures are not protected, the scope of the EC proposal is unclear and the legal basis for the proposal is doubtful.
Insurance Europe’s key messages are here and its more detailed concerns are here.

Wednesday, 23 May 2018

thumbnail

Andreas Brandstetter named president of Insurance Europe



Andreas Brandstetter, the CEO and chairman of Austria’s UNIQA Insurance Group, has been elected president of Insurance Europe, the European insurance and reinsurance federation, for a term of three years.
An Austrian citizen, Brandstetter has headed UNIQA since 2011. He joined the composite insurer, which is active in 18 European countries, in 1997.
Commenting on his appointment, Brandstetter said: “I am truly honoured to be elected to represent the European insurance industry as its federation’s president. Our industry makes a huge contribution to society, both through the protection we offer to customers and the long-term investments we make in the economy. Society is evolving rapidly and our industry must evolve too, so this is a particularly fascinating time to be representing Europe’s insurers, both within Europe and around the world.”
Brandstetter was elected today at Insurance Europe’s General Assembly meeting in Madrid. He will give a keynote speech tomorrow at the federation’s 10th International Conference.
He succeeds Sergio Balbinot, member of the management board at Allianz Group, who had served the maximum two mandates as president.
Brandstetter said: “I wish to thank Sergio for the incredible contribution that he has made over the last eight years. He has been a driving force and an outstanding representative for Europe’s insurers during his tenue.”

Thursday, 17 May 2018

thumbnail

Overview of insurers’ obligations under the GDPR published


Insurance Europe has today published an overview of insurers’ main obligations under the General Data Protection Regulation, which will apply from 25 May 2018. 
The GDPR introduces new and enhanced requirements for insurers to comply with when processing the personal data of consumers.
Insurers will have to enhance security and policy measures to ensure that consumers’ data remains secure, and put processes in place to enable consumers to exercise their rights under the GDPR.
The full overview is available here.

Tuesday, 15 May 2018

thumbnail

EIOPA LAUNCHES THE FOURTH EU-WIDE INSURANCE STRESS TEST



The aim is to assess vulnerabilities of the European insurance sector
 It is not a pass-or-fail exercise
  The stress scenarios encompass a combination of market and insurance specific risks as well as the exposure to cyber risk
  42 European insurance groups participate representing close to 78 % of the total European market coverage
 Increased transparency in the disclosure of the stress test results
 Frankfurt, 14 May 2018 – Today, the European Insurance and Occupational Pensions Authority (EIOPA) launched its fourth stress test for the European insurance sector. This regular exercise aims to assess insurers’ vulnerabilities. It is not a passor-fail-exercise. For each stress test, EIOPA tailors the scope and scenarios according to developments in market conditions and their potential negative implications for insurers. The 2018 scenarios encompass a combination of market and insurance specific risks, including a natural catastrophe scenario. The objectives of the fourth insurance stress test are:
 To assess vulnerabilities of the European insurance sector to specific adverse scenarios with potential negative implications for the European financial markets and the real economy
 To raise the awareness of the potential threats to financial stability posed by the insurance sector at the European level
 To increase transparency by requesting the voluntarily disclosure of individual results by participating groups This year’s exercise targets 42 European insurance groups. EIOPA, in coordination with the national competent authorities, selected the companies according to size, European Union-wide and local market coverage as well as relevance for financial stability. In total, the target sample represents approximately 78% European market coverage, based on total consolidated group assets according to Solvency II financial stability reporting.
The full list of the participating groups can be found here. The deadline for submission of results to the national competent authorities is 16 August 2018. EIOPA will regularly publish questions and answers addressing queries from the participating groups.
The publication of the stress test results is planned in January 2019. Gabriel Bernardino, Chairman of EIOPA, said: “The scenarios reflect severe but plausible external shocks including insurance specific shocks. Furthermore, for the first time the exposure to cyber risk and best practices in dealing with these risks is assessed.
This stress test will therefore provide further valuable insight to the resilience of the European insurance sector. The increased transparency is key to ensure a level playing field and enhance market discipline among the stress test participating groups.” 

Wednesday, 2 May 2018

thumbnail

Risk Dashboard for fourth quarter of 2017: Risk exposure of the European Union insurance sector remains stable



The results show that the risk exposure of the insurance sector in the European Union remained stable. Despite positive macroeconomic developments, low interest rates are still a major source of risk for European insurers. Credit and market risks continued at a medium level. Spreads further decreased and concerns about potential risk mispricing remained. Volatility of equity prices increased and valuations are now slightly lower. Median profitability levels were broadly the same as in the fourth quarter of 2016 and solvency positions continued to be strong for both groups and solo companies. The impact of the natural catastrophes from the third quarter kept insurance risks at a medium level. Market perceptions were mixed, with insurers' stock prices outperforming the market but at the same time there was a deterioration of the external rating outlook for some insurance groups.
Risk Dashboard based on fourth quarter of 2017 data.

Sunday, 29 April 2018

thumbnail

Fitch: Does Blockchain Represent a Paradigm Shift for Insurance?



Fitch Ratings views blockchain as a potential game-changing technology for the insurance industry over the long term. Benefits could range from significantly reduced operating costs, more accurate customer-specific data, and better risk pricing and improved efficiencies. However, the technology remains unproven, and greater clarity around its advantages and risks will be revealed over the next three to five years. As such, we do not see blockchain affecting insurer ratings over the short to intermediate term.
 Blockchain, also known as distributed ledger technology, is used in a decentralized fashion to digitally record and verify a wide range and volume of information relating to commercial transactions. The technology was initially created as part of the bitcoin cryptocurrency network. Blockchain's transparency, security and information storage capacity have recently attracted other industries to explore opportunities to leverage this technology.
Insurance is fertile ground for blockchain's capabilities. With the industry's large number of complex transactions between multiple parties, blockchain could theoretically offer significant cost reductions, improved processing speed, and enhanced underwriting and pricing, while reducing fraud. Efficiencies and cost reductions could be achieved by reducing the need for reconciliation and audits, automating certain processes and improving access to data. Estimates of the potential savings for the global (re)insurance industry from Pricewaterhouse Coopers and B3i, an insurance industry trade group focusing on blockchain, range from 15% to 30% of annual current expenses.
The uncertainties around this nascent technology remain pronounced. When and how much blockchain will be adopted remain major unknowns. Part of the challenge is that investment costs relative to benefits are uncertain, and there are numerous legal, regulatory and security issues that need to be addressed to facilitate wide-scale adoption.
There is also no particular urgent crisis that blockchain would address to necessitate immediate application. Fitch believes that the ultimate viability of the technology for the insurance industry will depend on a select group of industry leaders adopting blockchain to gain competitive advantages.
The insurance industry is taking tentative steps to explore the technology. The aforementioned B3i initiative has grown to 15 insurance industry firms, up from five when the technology first became available in 2016.
The RiskBlock Alliance was also created as an insurance industry trade group to facilitate blockchain use in risk management. The Fitch special report published today, "Blockchain and Insurance - The Trust Machine," assesses the potential benefits, risks and uncertainties regarding blockchain's application to the insurance industry. The report is available to subscribers through the link above or at www.fitchratings.com.

https://www.fitchratings.com/

Friday, 27 April 2018

thumbnail

EIOPA defines its supervisory convergence priorities



 The supervisory convergence plan focuses on the implementation of Solvency II and conduct of business supervision
 EIOPA defined three priority areas, namely the implementation of the common supervisory culture, addressing the risks to the internal market and to the level playing field which may lead to supervisory arbitrage as well as the supervision of emerging risks Frankfurt,

23 April 2018 – Today, the European Insurance and Occupational Pensions Authority (EIOPA) published its supervisory convergence plan for 2018-2019 for the insurance sector, focussing on the implementation of Solvency II and conduct of business supervision. Supervisory convergence should ensure a high, effective and consistent level of supervision throughout the European Union, granting a similar level of protection to all European policyholders and beneficiaries. To strengthen further supervisory convergence for 2018 and 2019, EIOPA defined the following three priority areas:
1. Implementation of the common supervisory culture and new supervisory tools 2. Risks to the internal market and the level playing field which may lead to supervisory arbitrage 3. Supervision of emerging risks
The implem entation of a common supervisory culture will include the further specification of each of the key characteristics of the common supervisory culture. In addition, EIOPA will develop common benchmarks for the supervision of internal models, work on a common basis for the supervisory assessment of conduct risks throughout a product’s life cycle, perform a thematic review on travel insurance and define good practices for the supervision of intra-group transactions and risks concentrations.
To address risks to the internal market and to the level playing field, EIOPA will analyse the consistency of the calculations of technical provisions in general and in a cross-border context in particular for non-life business such as the “decennial liability insurance” and “medical malpractice insurance”. Furthermore, special attention will be paid to the assessment of internal model outcomes, the detection of potential unsustainable cross-border business models and the establishment of specific collaboration platforms where needed.
In the area of supervision of emerging risks, EIOPA will develop good practices on the supervision of IT security and governance, including supervisory expectations on insurance undertakings’ practices on cyber security and explore efficient ways to perform a cyber-attack penetration test. A thematic review of the insurance industry’s use of big data as well as the monitoring of the potential consequences of the withdrawal of the United Kingdom from the European Union will continue to ensure consistency in supervisory approaches.
The priorities of the supervisory plan were identified according to their impact on policyholders and on financial stability as well as on the level playing field or the functioning of the internal market.
The priority areas include also those areas of supervision where practices across the European Union still differ substantially. At the beginning of 2019, the supervisory convergence plan will be updated and include a progress report. On conduct of business supervision, EIOPA has developed a broader strategy to address supervisory convergence from the conduct perspective.
The strategy underlines tools for improving market monitoring and risk identification and mitigation as well as developing proactive supervisory capacities across the European Union with the aim to tackle better potential consumer detriment. Gabriel Bernardino, Chairman of EIOPA, said: “Achieving supervisory convergence, one of EIOPA’s strategic goals, requires a collective effort by all national supervisory Page 3 of 3 authorities and EIOPA. This supervisory convergence plan sets key priority areas, which are crucial for achieving high-quality and effective supervision and the implementation of a common supervisory culture across the European Union in the interest of the policy holders.”