Tuesday, 12 March 2019


ESAs propose amendment to PRIIPs Key Information Document to clarify application to investment funds

The European Supervisory Authorities (ESAs) submitted a letter to the European Commission on the draft regulatory technical standards to amend the Delegated Regulation covering the rules for the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs).

The amendment clarifies the application of the KID to investment funds where these are offered as underlying investment options to a PRIIP (so-called "multi-option products" or "MOPs"). The amendment follows a recent decision by the European co-legislators to defer the application of the KID to these investment funds by two years from the end of this year until the start of 2022. The aim of the ESAs' proposal is to provide, in good time, legal certainty to market participants before the expiry of the current provision in the PRIIPs Delegated Regulation at the end of 2019.

Before the draft Regulatory Technical Standards (RTS) become binding, they need to be endorsed by the European Commission followed by a period of scrutiny by the European Parliament and the Council. 

Friday, 8 March 2019


Disappointing EC proposals are a missed opportunity to improve Solvency II

In response to the adoption of the European Commission’s final delegated acts amending the Solvency II delegated regulation, Olav Jones, deputy director general of Insurance Europe, commented:

“Insurance Europe is disappointed because, while some much-needed improvements and simplifications have been achieved, these are outweighed by the lack of progress on key issues impacting the industry’s ability to maintain and develop their long-term products and investments.”
Specifically, the industry has the following concerns:
  • Risk margin: Despite the fact that the industry provided extensive evidence that the risk margin could be safely reduced, the Commission took no action. According to EIOPA, the risk margin adds €200bn in addition to the amount of capital the industry needs to hold to meet all customer claims and high levels of solvency capital. Unfortunately, this especially impacts long-term products.
  • Volatility adjustment: There is evidence that this adjustment, designed to reduce artificial volatility for long-term business, does not work as intended. Under this review, a first step regarding the country-specific component was discussed; unfortunately, nothing has been included in the Commission’s text.
In addition, the industry has concerns about the unnecessary restrictions on the loss absorbing capacity of deferred taxes.
On the calibration of long-term investments in equity, Insurance Europe welcomes the Commission’s recognition that equity capital charges are currently too high where insurers can take a long-term approach to investment. It now remains to be seen how the Commission’s proposal works in practice. 

Jones continued: “Overall, this is a missed opportunity. The next review, to be completed by the end of 2020, needs to be much more ambitious in terms of identifying and prioritizing areas where — long-overdue — improvements to Solvency II can be made. It will have a direct impact on what the insurance industry can provide for customers, as well as its ability to support the Commission’s long-term goals of growth and investment for Europe.”

Wednesday, 6 March 2019


Estonia opens its market to mutual and cooperative insurance

Estonian Parliament passes new law in order to grow and diversify the Estonian insurance sector and business environment, Amendment to the Insurance Activities Act comes into force
The Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE), the voice of the mutual and cooperative insurance sector in Europe, welcomes the introduction by Riigikogu, the Estonian Parliament, of the Amendment to the Estonian Insurance Activities Act (Kindlustustegevuse seadus), broadening the scope of insurance company structures in Estonia. The Amendment recognises insurance associations (a type of mutual insurer) and European cooperative societies from 2 March 2019.
The Insurance Activities Act governs the insurance market in Estonia and transposes the Solvency II Directive into national legislation. The Amendment aims to diversify and strengthen Estonia’s insurance business environment. Additionally, the Estonian authorities anticipate that policyholders will benefit from increased choice, and entrepreneurs from new opportunity.
Today, more than half of all insurance undertakings in the EU are mutual and cooperative insurers, accounting for a market share of almost one third. Before the Amendment came in to force, Estonia was one of the few European countries where the mutual and cooperative insurance model was not recognised by law. It is anticipated that the official introduction of mutual and cooperative insurance to Estonia will serve to bolster the strength of this important sector, with the interests of the policyholder central to the business.
Sarah Goddard, AMICE Secretary General commented,
She continued:
“Research in our recent Facts and Figures Vol 2 report shows that the Estonian insurance sector has been performing well, with insurance premium revenues increasing significantly in the period 2007-2015. We look forward to further growth as the Amendment to the Act comes in to force, and to supporting the Estonian mutual insurance sector, its members and policyholders as it develops.”
The amended consolidated Insurance Activities Act is available in Estonian and English on the Riigi Teataja website.

European insurers welcome OECD work on financial education

Insurance Europe has welcomed the substantial work done by the Organisation for Economic Co-operation and Development (OECD) on financial literacy and education, as well as its explicit identification of insurance as a component of financial education strategies.
In its response to a public consultation on a recommendation the OECD is drafting on financial literacy and education, Insurance Europe suggested that one of the best ways of changing individuals’ behaviour is by starting early and integrating financial literacy into school curricula. It added that the workplace can also be an effective setting for providing information.
Insurance Europe also called for European and international policymakers to play a greater role in supporting national strategies, in particular urging the European Commission to come forward with a recommendation of its own.

MATRIX completes the acquisition of Piraeus Insurance Brokers and strategic partnership with Howden Broking Group

MATRIX Insurance and Reinsurance Brokers, the leading independent broker at Lloyd’s focusing on Southern and Eastern Europe, announces that it has completed in full the acquisition of the entity Piraeus Insurance Brokers, the broking arm of the largest Greek bank pursuant to the Share Sale and Purchase Agreement dated 31.12.2018. In particular, the final technical steps of the acquisition pursuant to the aforementioned Agreement, have been completed, along with a strategic partnership with Howden Broking Group, one of the world’s largest independent retail brokers . 
Dimitris Tsesmetzoglou, CEO of MATRIX Insurance and Reinsurance Brokers, stated: “Our acquisition of Piraeus Insurance Brokers is reinforced by our strategic partnership with Howden. It underlines MATRIX’s capacity to provide increasingly exceptional and added value services and benefits to existing and future clients, as well as to the larger corporate clients of the largest Greek bank. For MATRIX, this is the most important milestone, to date, and we are satisfied that we will be able, with amplified financial strength and immediate international access, to guarantee to all stakeholders an even larger, more competitive and holistic spectrum of insurance and reinsurance solutions, products and services.”
José Manuel González, CEO of Howden Broking Group, commented: “Howden is delighted to partner with MATRIX, a leading broker in the Greek and Cypriot market, at an exciting time in its development. The partnership will enable us to combine MATRIX’s strengths in its local markets with Howden’s international reach and provide the benefits of both organisations to MATRIX’s clients.”
Canaccord Genuity acted as financial adviser to MATRIX, and FieldFisher as legal counsel.  Norton Rose Fulbright acted as legal counsel to Hyperion Group.

MATRIX is an independent insurance and reinsurance broker, providing innovative structured products and services since 2003. The company became a registered Broker at Lloyd’s since September 2012 and has established local presence in key territories with offices in five countries (Greece, Cyprus, South Africa, Turkey and Switzerland), while the Group’s business scope expands in over 22 countries via expert network partnerships. 

For more information, visit www.matrix-brokers.com.
Howden, the retail broking arm of Hyperion Insurance Group, provides a range of specialist insurance solutions to clients around the world. Together with Howden One, its global specialist insurance broking network, it comprises over 10,000 professionals, operating in more than 90 territories, and handling a combined Gross Written Premium of over USD22bn.
For more information, please visit www.howdengroup.com.


Hyperion is a leading international insurance group with employee ownership at its heart. Founded in 1994, 2019 marks its 25th anniversary. It comprises broking divisions Howden and RKH, underwriting division DUAL, and data analytics and digital delivery business, Hyperion X. Hyperion’s businesses operate across Europe, Asia, the Middle East, Latin America, the USA, Australia and New Zealand, employing over 4,500 people in 38 countries.
For more information, please visit www.hyperiongrp.com

Monday, 4 March 2019


Detailed European insurance statistics published: insurers paid out €2.8bn a day in claims in 2017

Insurance Europe latest statistics show that gross written premiums in Europe increased 4.7% year-on-year to €1 213bn in 2017, with the highest growth in the general liability and life business lines. 
Claims and benefits paid increased 8.8% to €1 014bn, equivalent to €2.8bn a day. With the total investment portfolio growing 1.2% to €10 226bn, the industry retained its position as Europe’s largest institutional investor.
The latest edition of Insurance Europe’s “European Insurance in Figures” report contains detailed 2017 data on life, health and property & casualty premiums and claims, as well as the industry’s investments and market structure.

Monday, 25 February 2019


Insurers respond to ESRB systemic risk report: no additional prudential rules needed

Insurance Europe has responded to the European Systemic Risk Board’s report on macroprudential provisions, measures and instruments for insurance.

While Insurance Europe supports an effective macroprudential framework that mitigates potential systemic risk in the financial system, the limited level of systemic risk originating from the insurance industry means additional macroprudential measures are not needed.
This is because a comprehensive macroprudential monitoring framework is already in place, which includes many instruments with a macroprudential impact. In particular, the recently-implemented Solvency II framework represents a regime change in insurance supervision that also includes many new macroprudential elements, the impact of which will only become apparent over time.
Any approach taken for the regulation of macroprudential risk in insurance should take full account of developments at international level and be globally-consistent.

Wednesday, 20 February 2019


US Base Erosion and Anti-abuse Tax discriminates against non-US affiliate reinsurers

In response to the recently-published US Treasury/Internal Revenue Service’s proposed Base Erosion and Anti-abuse Tax (BEAT) regulations, Insurance Europe has reiterated that the BEAT is discriminatory towards non-US affiliate reinsurers because it applies to gross premiums paid to foreign affiliate reinsurers, but not to premiums paid to US-based affiliate reinsurers for the same type of transaction. 

While Insurance Europe understands and supports the policy objective behind the BEAT (ie, to prevent base erosion), the fact is that the BEAT attaches to a far greater amount than could be attributed to any base erosion behaviour on the part of foreign affiliate reinsurers. It is therefore extremely punitive and disproportionate. In addition, the BEAT results in double taxation for foreign affiliate reinsurers and the proposed regulations do not provide any relief in this respect.
Furthermore, applying the BEAT to gross, rather than net reinsurance payments, does not reflect the economic substance of a reinsurance contract and goes against the long-established practice of levying taxes on net rather than on gross transactions.
Finally, Insurance Europe’s views on this matter are also consistent with the conclusions of the Organisation for Economic Co-operation and Development’s (OECD) base erosion and profit shifting (BEPS) action plan: namely that foreign affiliate reinsurance cannot be considered a tax avoidance scheme, as long as it respects a number of criteria, which are detailed in this paper.
In addition to the broader policy concerns expressed above, Insurance Europe also made comments relating to two technical issues that arise under the proposed Treasury/IRS regulations.

Friday, 15 February 2019


Insurers and asset managers call for expiry date of PRIIPs derogation for multi-option products to be aligned with end of UCITS exemption

Insurance Europe and the European Fund and Asset Management Association (EFAMA) have written a joint letter to the European Commission and the European Insurance and Occupational Pensions Authority (EIOPA) saying that current rules allowing the use of information documents prepared under the UCITS Directive for multi-option products (MOPs) under the PRIIPs Regulation must be urgently extended in order to ensure consumers can continue to receive pre-contractual information about these products.
Currently, where the underlying funds of an insurance-based product are UCITS funds or other funds where a UCITS key investor information document (KIID) is produced rather than a PRIIPs KID, the PRIIPs rules allow insurers and asset managers to produce a generic PRIIPs KID for the overall product and to provide investors with the existing UCITS KIID for each of the underlying funds.
This rule was linked to the temporary exemption of UCITS from the PRIIPs Regulation, which was due to expire in December 2019. However, a recent agreement between the EU institutions has extended this exemption – but, the rules on disclosure will still expire in December 2019.
This will create a significant compliance burden for insurers and asset managers, who will need to produce entirely new data to populate the PRIIPs KID. In addition, where the data can simply not be produced, the range of products offered to consumers will ultimately decrease.
Therefore, Insurance Europe and EFAMA called for the necessary legislation to extend these rules to be adopted prior to the European elections in May.

AMICE:Joint statement signed in Brussels on the effects of regulatory requirements and compliance on employees

The Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE), the voice of the mutual and cooperative insurance sector in Europe, together with the Insurance Sectoral Social Dialogue Committee (ISSDC), has today signed a statement on the effects of regulatory requirements and compliance on employees, and announced a follow-up to the joint declaration on the social effects of digitalisation.
The legislative reform of the insurance sector over the last decade is well documented. Ten years on, the pressure of reform is affecting people working in the financial services sector, as operators, customers and financial sector employees are witnessing the effects of increasingly burdensome, heavy-handed and duplicative legislative reforms.
For customers, the disclosure of extensive and technical information impedes straightforward decision making, creates confusion and makes the decision-making process unnecessarily difficult and stressful.
For employees, legislative reform has affected their wellbeing. In particular, the European social partners in the insurance sector noted that the significant increase in regulatory requirements has led to a substantial rise in insurance employees’ workloads and stress levels, and today they call for employees to be given enough time to assimilate the latest changes in legislation and sufficient time to apply them.
Implementing new regulatory requirements involves the development and adoption of complex company compliance procedures, which need to be accompanied by proper training. The social partners declare in their statement that they are concerned about short implementation deadlines which leave too little time to properly implement complex and comprehensive pieces of legislation and for employees to have appropriate training.
The social partners further note that the negative effects have a disproportionate impact on small and medium-sized entities, which contribute significantly to local economies but face a heavy burden keeping up with constant regulatory changes.
Sarah Goddard, AMICE Secretary General commented,
She continued,
“The pressure on people working in the financial services industry on understanding and implementing such wide-ranging and complicated regulatory requirements has taken a significant toll. It is important to remember that insurance is ultimately a people business, and that we have a responsibility to ensure that all employees are protected from undue stress.”
In addition to the statement on the effects of regulatory requirements and compliance on employees, the Insurance Sectoral Social Dialogue Committee (ISSDC) has issued a follow-up to build on the declaration on the social effects of digitalisation signed in October 2016. This follow-up looks to respond to the recent and increasingly rapid development of digitalisation. It seeks to frame further common measures across all participating organisations and their members to ensure long-term employability of the mutual and cooperative insurance workforce.
§  Further training as a key
§  Time and place of work
§  Dealing in a social way with the digital structural change
§  Employees’ representatives in the digital age

The declaration aims to safeguard jobs and the employability of employees; improve the work-life balance of employees; encourage the adoption of all appropriate digital communication channels; and underline the need for continuous training to be provided by insurance companies and the importance of employees’ willingness to undertake such training.
The full documents are available from the AMICE Secretariat or via the AMICE website.

To continue building on the work already achieved, the European social partners in insurance will monitor the development of employment in the sector on a yearly basis, taking due account of existing statistics.