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.
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Insure yourself wisely: motor insurance



Insurance Europe has published an infographic today to help consumers ensure that they have appropriate motor insurance cover, drive safely in an increasingly connected world and know what to do in the event of an accident.
Consumers are, for example, encouraged to do a little research to find the motor insurance policy that best suits their needs. Insurance Europe also recommends that consumers do not just focus on the price of the policy, but also pay attention to exactly what it covers.
As driving across borders is an everyday reality in Europe and accidents between vehicles from different countries are common, Insurance Europe also published a step-by-step guide today on what consumers should do if they are involved in a road accident while travelling abroad.
The motor insurance infographic and the guide to the claims process for accidents abroad are part of Insurance Europe’s #InsureWisely campaign, which aims to increase financial literacy and awareness levels across Europe.
Financial education plays a vital role in ensuring that European citizens are equipped with the knowledge, confidence and skills necessary to improve their understanding of financial products and concepts. Insurance Europe also encourages EU policymakers and regulators to play a greater role in supporting this objective.

Tuesday, 30 October 2018

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EIOPA: Review of illiquid liabilities and analysis of potential implications: Request for feedback launched


One of the most debated issues before the Solvency II implementation and still nowadays is the treatment of long-term insurance business. In addition to the LTG Review, EIOPA also embarked in work to further explore evidence on the features of liabilities, especially concerning their illiquidity characteristics. Therefore, a dedicated EIOPA Project Group on Illiquid Liabilities was set up. The illiquidity characteristics of liabilities may contribute to the ability of insurers to mitigate short-term volatility by holding assets throughout the duration of the commitments, even in times of market stress.

A Request for Feedback on Illiquid Liabilities is being launched today, on Monday 29 October 2018 and open until Friday 7 December 2018.  With this, EIOPA asks stakeholders for feedback on the envisaged approaches to assess the illiquidity characteristics of insurance liabilities, the actual holding periods of assets of insurers  as well as the risks of holding assets over a longer term.

Such analysis will contribute to EIOPA's further assessment whether the risks connected to illiquid liabilities and the assets covering long-term liabilities are adequately reflected in the current regulatory regime.

Monday, 29 October 2018

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Too early to harmonise EU insurance guarantee schemes



Insurance Europe has responded to a discussion paper from the European Insurance and Occupational Pensions Authority (EIOPA) on resolution funding and national insurance guarantee schemes (IGS). 
Insurance Europe said that the effects of the EU’s 2016 Solvency II regulatory regime for insurers on policyholder protection need to be better understood before considering any harmonisation of IGS at EU level. Rather than considering new rules for IGS, the existing tools and powers provided by Solvency II should be used to their fullest extent and be properly enforced.
While EIOPA acknowledges that “adequate protection of policyholders is at the core of Solvency II”, its discussion paper lacks any assessment of how Solvency II actually affects the risks faced by insurers and how this might, in turn, affect existing national IGS.
Insurance Europe pointed out that EIOPA’s paper refers to insurance failures and near misses that occurred before the Solvency II regime and are therefore no longer relevant.
Should minimum harmonisation in the field of IGS be pursued at EU level, Insurance Europe said national authorities should be allowed significant flexibility to choose features that best suit their market.
To satisfy the EU’s principles of proportionality and subsidiarity, the functioning and funding of IGS should be left to the discretion of member states. This is to reflect the substantial differences between the social welfare systems, winding-up processes for insurers and insurance product lines in member states.
Any further work at European level should therefore be outcome-oriented and not seek to harmonise the organisation or funding of IGS.

Sunday, 28 October 2018

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ESAs propose new amendments to technical standards on the mapping of ECAIs



The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) launched  a public consultation to amend the Implementing Regulations on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk to reflect the outcomes of a monitoring exercise on the adequacy of existing mappings, namely changes to the Credit Quality Steps (CQS) allocation for two ECAIs and the introduction of new credit rating scales for ten ECAIs. The Implementing Regulations are part of the EU Single Rulebook for banking and insurance aimed at creating a safe and sound regulatory framework consistently applicable across the European Union (EU). The consultation runs until 31 December 2018.
In the Implementing Regulations on the mapping of ECAIs, adopted by the European Commission on 11 October 2016, the three ESAs specified an approach that establishes the correspondence between credit ratings and the credit quality steps defined in the Capital Requirements Regulation  (CRR) and in the Solvency II Directive.
The ESAs are now consulting on an amendment to the Implementing Regulation to reflect the outcome of a monitoring exercise on the adequacy of the mappings, based on a quantitative and qualitative assessment. In particular, the ESAs are proposing to change the CQS allocation for two ECAIs, together with the introduction of new credit rating scales for ten ECAIs.
The ESAs also published individual draft mapping reports illustrating how the methodology was applied to produce the amended mappings in line with the CRR mandate.
Consultation process
Comments to the Consultation Paper on the mapping under Article 136 of the CRR can be sent by clicking on the "send your comments" button on the EBA's consultation page. Comments to the Consultation Paper on the mapping under Article 109 (a) of the Solvency II Directive can be provided using the template for comments downloadable from EIOPA's website. Please note that the deadline for the submission of comments is 31 December 2018.
All contributions received will be published following the close of the consultation, unless requested otherwise.
Legal basis
The proposed revised draft ITSs have been developed according to Article 136 (1) and (3) of Regulation 575/2013 (Capital Requirements Regulation) and of Article 109 (a) of Directive 2009/138/EC (Solvency II Directive), which state that revised draft ITS  shall be submitted by the ESAs, where necessary.

Thursday, 25 October 2018

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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.

Wednesday, 17 October 2018

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Global insurers unite in their call for IFRS 17 improvements and a delay



A global group of nine insurance associations has written a joint letter to Hans Hoogervorst, chair of the International Accounting Standards Board (IASB), that highlights the industry’s concerns about the International Financial Reporting Standard (IFRS) 17 for insurance contracts. 

Extensive testing, together with insurers’ detailed implementation planning, has confirmed that a number of important issues still need to be resolved in order to ensure the quality and operational practicability of the new standard.

There is also industry-wide agreement that a delay of two years is needed, both to allow for the necessary improvements to be made to the standard and for adequate time for companies to tackle the significant implementation challenges that IFRS 17 presents.

The fact that so many insurance associations from around the world have signed this letter demonstrates the importance and urgency to have a decision on a delay and for the IASB to move forward on the necessary improvements.

The full letter is available here.

Tuesday, 9 October 2018

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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

Wednesday, 3 October 2018

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European insurers: IFRS 17 must be good enough: it isn’t yet



European insurers are committed to a high-quality reporting standard for insurance contracts that improves insurers’ financial reporting. The industry therefore supports the new International Financial Reporting Standard (IFRS 17) for insurance contracts and is allocating considerable resources to prepare for its implementation.
However — as confirmed by the European Financial Reporting Advisory Group’s (EFRAG) own studies — there are problems with the way the standard depicts insurers’ performance and business model that must be resolved before IFRS 17 is endorsed.
IFRS 17 must be reopened and the 11 issues that were identified during EFRAG’s testing must be addressed. Implementation of the standard needs to be delayed by two years to allow time to make the necessary improvement and to allow time for the wide range of companies that are affected to implement the standard.
The decision to re-open IFRS 17 should be made as soon as possible and as much clarity given on the impact to the application date to allow companies to plan accordingly. However, there is no expectation that a delay will result in companies pausing implementation projects.
The additional time will allow insurers to deal with operational constraints, such as the current lack of software solutions, and will allow for implementation of suitable quality and reliability. It will also allow for a better understanding of the potentially very different new financial reporting figures.
The industry is well advanced in its efforts to propose workable solutions to the 11 issues that have been raised.

Tuesday, 25 September 2018

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G20 Insurance Forum: Insurers’ role in tackling global challenges

Discussions at the G20 Insurance Forum, which is being held over the next two days in Argentina, will provide a fascinating insight into the opportunities and challenges facing the global insurance industry, according to the Global Federation of Insurance Associations (GFIA).
The first session will examine insurers’ role in boosting resilience and stability in society, and the part insurers play in food security and agricultural issues.
GFIA’s vice-president, Recaredo Arias, commented: “Insurers already play a vital role in supporting resilience and stability in all sectors of the global economy, including agriculture. It is vital, however, to find ways to extend that protection to as many people as possible.”
The second session, which GFIA’s vice-president will chair, looks at ways to promote long-term and sustainable investment in infrastructure.
Arias said: “Insurers are in the business of making long-term and sustainable investments, including those in infrastructure. This corresponds to the needs of governments, who are increasingly seeking to attract private infrastructure investment to relieve pressure on public resources.”
The third session examines how insurers are responding to cyber risks and the digitalisation of society, as more and more people buy insurance online and using their mobile devices. “Insurers are working harder than ever to remain at the forefront of the digital revolution and to provide products in a convenient and secure way to their online customers,” added Arias.
The final sessions will focus on the role of international reinsurers in an increasingly globalised economy. “Reinsurers are vital in a modern, globalised economy, due to the role they play in ensuring that insurance remains available and affordable,” commented Arias.