Wednesday, 18 December 2019

EIOPA publishes the results of the 2019 Occupational Pensions Stress Test

 The European Insurance and Occupational Pensions Authority (EIOPA) published the results of its 2019 Institutions for Occupational Retirement Provisions (IORPs) Stress Test. This is a crucial, biennial exercise to assess the resilience and potential vulnerabilities of the European Defined Benefit (DB) and Defined Contribution (DC) pension sector, tailored to the specificities of the diverse European pension sector and its potential impact on financial stability. For the first time, this European stress test exercise covered the analysis of Environmental, Social and Governance (ESG) factors for IORPs.
In its 2019 exercise, EIOPA applied an adverse market scenario, characterised by a sudden reassessment of risk premia and shocks to interest rates on short maturities, resulting in increased yields and widening of credit spreads. That adverse market scenario was applied to the end-2018 'baseline' balance sheet of a representative sample of European Economic Area (EEA) IORPs. In the baseline, those IORPs were underfunded by EUR 41 billion on aggregate, which translates into 4% of their liabilities, according to the common methodology.
The adverse market scenario would have led to substantial aggregate shortfalls of EUR 180 billion according to national methodologies and EUR 216 billion following the stress test's common methodology. Under the assumptions of the common methodology, the shortfalls in the adverse scenario would have triggered aggregate benefit reductions of EUR 173 billion and sponsoring undertakings would have to provide financial support of EUR 49 billion. In the 2019 exercise, EIOPA employed an extended cash flow analysis, which provided important insights into the stress effects in terms of timing: IORPs' financial situation would be heavily affected in the short term, leading to substantial strains on sponsoring undertakings within a few years after the shock and resulting in potential long-term effects on the retirement income of members and beneficiaries over decades (should the short-term effects become permanent).
Assessing the potential conjoint investment behaviours of IORPs after the stress event, EIOPA observed an expected tendency to re-balance to pre-stress investment allocations within 12 months after the shock. That may indicate counter-cyclical aspects of the expected investment behaviour, yet would also come at a risk.
The majority of IORPs in the sample indicated having taken appropriate steps to identify sustainability factors and ESG risks for their investment decisions, which is important for an effective implementation of the IORP II Directive, yet only 30% of them have processes in place to manage ESG risks. Further, only 19% of the IORPs in the sample assess the impact of ESG factors on investments' risk and returns. The preparedness of IORPs to integrate sustainability factors is widely dispersed and seems correlated to how advanced national frameworks were.
Matching the participating IORPs' investment information with Eurostat's greenhouse gas emission statistics by business sectors, indicates a relatively high carbon footprint, compared to the average EU economy, of the equity investments and, concentrated in a few Member States, of the debt investments.
In total, 19 countries participated in the exercise, covering more than 60% of the national DB and 50% of the national DC sectors in terms of assets – in most countries. In total 176 IORPs participated, thereof 99 DB IORPs and 77 DC IORPs.
EIOPA will follow-up on the findings and analyse in more depth the investment behaviour of IORPs, in particular in the persistently ultra-low and negative interest rate environment. To do so, EIOPA will make use of the significantly improved pension reporting from 2020. Going forward, EIOPA wants to further improve its analytical tool set for stress testing IORPs, extending the horizontal approach and with that assessing the common exposures and vulnerabilities of the DB and DC sectors together. 
Gabriel Bernardino, Chairman of EIOPA, said: 'Long-term obligations and long investment horizons arguably require IORPs to consider ESG factors and enable IORPs to sustain short-term volatility and market downturns for longer periods than other financial institutions.
The supervisory monitoring and the applied supervisory tools need to be capable of detecting adverse market trends and market developments that can have long-term negative effects.'
For more information, visit the dedicated webpage or read the factsheet.

Thursday, 12 December 2019

Insure yourself wisely: natural catastrophes

Insurance Europe has today published an infographic on steps people can take to limit their losses from natural catastrophes. While meteorological events such as storms, floods or drought are often unpredictable and outside of our control, things can be done to reduce the likelihood of loss.
Be prepared
Prevention is the best protection, so familiarise yourself with the possible risks in your area and what to do when an emergency arises.
Choose the right policy for you
Having an appropriate insurance policy will help you to cover potential damages as a result of a natural catastrophe.
Know your coverage
Be sure to read and understand the terms and conditions of your insurance policy, including what is covered and what possible exclusions there might be.
Making a claim
If you do suffer a loss as a result of a natural catastrophe, contact your insurer immediately for help and advice.
Insurers can provide expertise
Insurers not only provide insurance cover but can also help you to prepare and protect yourself against a natural catastrophe.
The infographic is 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, 10 December 2019

Why insurance is unique

Insurance is a unique financial service, without which many aspects of modern societies and economies simply could not function. And due to its special features, the insurance industry requires a tailored regulatory approach that reflects its business model.
new publication from Insurance Europe urges policymakers to make sure the industry’s special features are taken into account when developing insurance regulation.
“Why insurance is unique — and offers unique benefits for consumers” sets out four essentials:
  • The freedom to underwrite — Standardising policies or introducing compulsory schemes can have a negative effect on the cost and availability of policies. Insurers must be able to develop products that meet their customers’ expectations, fit their risk profiles and meet legal and fiscal national requirements.
  • Tailored prudential regulation — The regulatory framework needs to reflect the fact that insurers usually have stable, up-front and long-term funding and low exposure to liquidity risk and market volatility.
  • Regulation that reflects unique distribution and varying consumer needs — Insurance products are distributed completely differently to investment products. Regulation needs to reflect this or it could lead to fewer points of sale and less consumer choice.
  • Flexibility to present products and costs in a comprehensive way — The EU’s PRIIPs Regulation that governs disclosures for insurance-based investment products fails to capture the key features of insurance products and as a result misrepresent certain information that is important to retail investors.

Life Insurance Providers Global Market Report 2020

The life insurance providers market consists of sale of life insurance policies. Life insurance providers enter into a legal contract with the insurance policy holder, where the insurer (life insurance provider) promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person. The life insurance providers are primarily engaged in the pooling of risk by underwriting insurance (that is, assuming the risk and assigning premiums) and annuities.

The global life insurance providers market was valued at about $2951 billion in 2018 and is expected to grow to $3586.96 billion at a CAGR of 5.0% through 2022.

North America was the largest region in the life insurance providers market in 2018, followed by Asia Pacific.

The rise in disposable income in emerging countries such as India and China is expected to drive the life insurance providers market. Economic growth in the middle income group translates to higher disposable income which allows them to invest in life insurance products. According to report by Swiss Re Institute’s, world’s seven largest emerging markets will contribute 42% of global growth with China contributing 27%. This rising disposable income, especially in emerging countries is expected to increase demand for life insurance plans thereby driving the life insurance providers market.

Lack of awareness about life insurance and complex insurance products are acting as a restraint on the life insurance providers market. A large number of people tend to invest in traditional investment instruments as they are unaware about the benefits of life insurance. According to a survey conducted by PHD Research Bureau in 2016, around 49% of the population in India is not familiar with insurance products and around 57% of the people find insurance products too complicated and difficult to understand. This lack of awareness and information proves to be a restraint on the life insurance providers market.

Robotic process automation and artificial intelligence have transformed the way in which business is done in the insurance industry. Robotic process automation and artificial intelligence are being used in the life insurance industry to accurately predict outcomes, improve customer service, guide the development of new products, detect risks and cross-promote products. For example, Aditya Birla Sun Life Insurance has launched DISHA 2.0, an Upgraded AI-Enabled ChatBot in 2018 to navigate personalized solutions for life insurance choices. These technological developments will enhance the customer experience and will drive the market.

Life insurance companies are monitored by regulatory bodies such as the National Association of Insurance Commissioners (NAIC) in the USA, the Prudential Regulatory Authority (PRA) in the UK, and the China Insurance Regulatory Commission in China. For instance, the China Insurance Regulatory Commission (the “CIRC”), established on November 18, 1998, is authorized by the State Council to conduct administration, supervision and regulation of the Chinese insurance market, and to ensure that the insurance industry operates stably in compliance with law. CIRC is responsible for licensing, developing regulations on administration of reinsurance business and measures on administration of life and health insurance.

CVS Health, a pharmacy company has acquired a life insurance company Aetna in 2018 for a total transaction value of $78 billion. The agreement between both the companies include enhanced consumer and health insurance rate protections, privacy controls, cybersecurity compliance. The merger will include new programs and services designed to target better, more efficient management of chronic disease using the capabilities of the merged company such as technology, data, and analytics. Aetna begins offering participating life insurance policies, which paid dividends to policyholders. Aetna was famous for its aggressive promotional strategies and higher commission rate for agents.

Major players in the market are Munich Re, AXA, Generali, Allianz and China Life Insurance Company Limited.

For more information about this report visit

Thursday, 5 December 2019

EIOPA publicly consults on its approaches for regulating key aspects of the Pan-European Personal Pension Product (PEPP)

The European Insurance and Occupational Pensions Authority (EIOPA) launched the public consultation of its approach to the regulatory and implementing standards, and technical advice to the European Commission on delegated acts, as mandated by the Pan-European Personal Pension Product (PEPP) Regulation.
The Consultation Paper sets out EIOPA's current stances to approach the regulation of key aspects of the PEPP, underpinning the idea of establishing a simple, safe and cost-efficient savings product.
In developing its proposals, EIOPA sought input from the supervisory community of the insurance and pension sectors, the other European Supervisory Authorities, and conducted an active dialogue with EIOPA's stakeholder groups and the Expert Practitioner Panel on PEPP.
The resulting key considerations are:
  • PEPP information documents: pre-contractual and annual information on the PEPP and its investment options have to be highly standardised to allow for comparability between PEPPs and for the consumer to track the performance of the chosen PEPP. The information needs to be relevant and tailored to the pension objective of the PEPP. The proposals are built on the experience with packaged retail investment and insurance-based products (PRIIPs) and the Directive on the activities and supervision of institutions for occupational retirement provision (IORP II), yet tailored to the specificities of PEPP, in particular its long-term nature, whilst making the PEPP ready for digitalisation.
  • Cost cap of the Basic PEPP: the cost-efficiency of the Basic PEPP is enforced by the introduction of a cost cap. In line with the PEPP's policy objective, an 'all inclusive' approach is suggested, while ensuring a level playing field amongst providers offering different features and in particular a guarantee on the capital invested.
  • Risk-mitigation techniques: it is necessary to set out the principle objectives for the risk-mitigation techniques to foster investment strategies leading to better pension outcomes. Clear and auditable criteria are needed to ensure the effectiveness of the chosen risk-mitigation technique.
  • Supervisory Reporting and cooperation between NCAs and EIOPA: enabling an efficient functioning of the PEPP market requires close monitoring and effective product supervision both from a home and host perspective - which is only possible with regular information exchange on PEPP business.
  • EIOPA's product intervention powers: relevant criteria, tailored to the PEPP, have been developed, building on past experience with product intervention powers at the level of the ESAs.
Stakeholder feedback is necessary to further develop the proposals and to ensure that the regulation delivers on the promise of the PEPP as an effective tool to complement pension savings in Europe.
The consultation ends on 02 March 2020.
Gabriel Bernardino, Chairman of EIOPA, said: 'The current macro-economic environment with persistent low and negative yields requires the rethinking of long-term retirement savings solutions. The implementation of the PEPP Regulation is an opportunity to build an appropriate regulatory basis for the design and monitoring of innovative and cost‑effective products that could enable European savers to reap the benefits of sustainable growth.

EIOPA invites all stakeholders to contribute to this consultation in order to ensure that the PEPP will be a success for the benefit of European citizens.'

Wednesday, 4 December 2019

New paper: Making EU insurance regulation that works and benefits consumers

Insurance Europe has today published a new paper on how EU policymakers can ensure rules for insurers work properly and benefit consumers. The insurance industry firmly supports high-quality regulation that protects consumers and helps them to buy the right products.
Unfortunately, EU financial services rules do not always achieve their aim of benefiting consumers and the current regulatory processes themselves do not always lead to good outcomes. It is encouraging, therefore, to see that this has been recognised by the new European Commission.
In the paper, Insurance Europe calls on EU policymakers to:
  • Avoid continual regulatory changes – Policymakers should perform in-depth analysis to ensure that any new legislation (Levels 1, 2 and 3) is fit for purpose from the start. At the same time, they should keep the regulatory framework stable and change rules only if it will  demonstrably benefit consumers.
  • Avoid legal uncertainty – Policymakers should allocate the necessary time and resources to meaningful consultations with all stakeholders. The insurance industry’s experience can help the EU to produce high-quality legislation that provides maximum legal clarity.
  • Avoid inconsistencies, overlaps and duplication – Coherence and consistency across EU legislation must be ensured. This can be achieved by assessing the cumulative impact that the proposed rules and existing rules would have on consumers.
  • Avoid unfit rules and disclosures that mislead consumers – Policymakers must ensure that disclosures are clear, meaningful and help consumers to understand insurance products.
  • Avoid outdated rules and obstacles to pro-consumer innovation – Policymakers must design digital-friendly rules to allow consumers to access information or services digitally if they wish and to benefit from the opportunities that digitalisation offers. They should also make rules future-proof and innovation friendly, so they are fit for the digital age and allow insurers to respond to the evolving needs and expectations of consumers.
  • Avoid implementation timelines that are too short – There must be separate timeframes for developing Level 2 and 3 measures and for industry implementation. Insurers must also be provided with at least one year for implementation after Level 2 texts are published in the Official Journal of the EU.
Insurance Europe also published a decision tree to help policymakers to ensure they make the right choices for consumers when designing and reviewing insurance rules.

Thursday, 28 November 2019

Michal Hucal appointed CEO of NN Hungary as of 1 January 2020

Michał Hucał will be appointed Chief Executive Officer (CEO) of NN Hungary, effective 1 January 2020, subject to regulatory approval. He will succeed Imre Sztano who will be appointed Chief Digital Officer Insurance International as of 1 February.
Michał will join NN Hungary from Nationale-Nederlanden Poland where he has held the position of Chief Commercial Sales Officer since 2018. In this role, he is responsible for the non-life business line in Poland as well as the digital insurance sales channel. Prior to joining NN, Michał held various senior management roles with Alior Bank in Poland. As CEO of NN Hungary, Michał will focus on continuing our growth in the local market.   
NN Group in Hungary
We established our market presence in Hungary in 1991 and offer Life Insurance and Health Insurance.

Friday, 22 November 2019


Generali presented  Arte Generali, an innovative global business unit that positions itself as an insurance partner to art collectors. Arte Generali was first announced in occasion of the Group’s Investor Day in November 2018. Arte Generali offers innovative and personalized solutions that go beyond insurance coverage for art pieces, jewelry and other valuable belongings and include assistance in the form of, for example, restoration, transport and storage, as well as digital tools that make use of the latest technology.

The new global unit is headquartered in Munich, Germany, and reports to Giovanni Liverani, CEO of Generali Deutschland and global sponsor of Arte Generali. The central hub supports local underwriting and claims management teams empowered by unmatched services and cutting-edge technology.

Arte Generali is inspired by the Group’s aim to expand its value proposition to customers - as part of its “profitable growth” strategic pillar - by entering the art insurance segment. Generali expects that the global art value will increase by more than 20% from 2017 to 2022 and that the art insurance revenues world-wide will rise by 6% yearly on average over the same period to reach $2.3 billion. Arte Generali aspires to become a top-three player in the global art insurance segment in five years.

Philippe Donnet, Generali Group CEO, said: “I am very glad to announce the launch of Arte Generali, a milestone in the execution of Generali 2021. With Arte Generali, we start a new chapter in Generali’s history within the insurance industry. Furthermore, Arte Generali resonates strongly with Generali’s expertise, legacy and DNA as it can build on the Group’s leadership in terms of technical insurance performance and on its tradition as a patron to the arts and the culture.”

Giovanni Liverani, CEO of Generali Deutschland and member of the Group Management Committee, said: “Arte Generali will complement Generali’s offering across all geographies and provide innovative solutions and service to meet the highest expectations while tapping into a growing market. I am very glad for the support of two world-class artists like Oliviero Toscani and Maurizio Cattelan as testimonials of this venture.”

Jean Gazançon has been appointed Arte Generali’s CEO. A graduate of Sciences Po, Jean brings extensive international experience developed in Europe, Japan and Latin America in the fields of art, art insurance and wealth management.


Arte Generali’s image was created and developed by the world-famous photographer Oliviero Toscani in collaboration with Maurizio Cattelan, one of the most popular and iconic contemporary artists worldwide.

Oliviero Toscani said: “It was with great pleasure that I joined again the Generali Group and face this exciting challenge with Arte Generali’s team of passionate and competent leaders, with whom I feel strongly in sync. Generali is one of the most trusted names in the insurance industry in Europe and across the world – a name that reminds me of Italy, tradition, history, culture and art. Arte Generali’s image aims to reinforce these perceptions while leaving a meaningful memory in the viewers’ eyes and brains.”

Maurizio Cattelan said: “Arte Generali’s brand campaign juxtaposes the risk run by art collectors of their art pieces being stolen with the metaphorical act of stealing that every artist commits. My whole career has been based on the non-existence of originality – in other words, the ability to invent by adding to something that has been invented already, or the ability to elicit unexpected emotions by triggering emotions that one felt already before.”

Allianz partners with Microsoft to digitally transform the insurance industry

Allianz COO Christof Mascher (left) with Jean-Philippe Courtois, EVP and President of Microsoft Global Sales, Marketing and Operations

Allianz SE and Microsoft Corp. announced a strategic partnership focused on digitally transforming the insurance industry, making the insurance process easier while creating a better experience for insurance companies and their customers. Through the strategic partnership, Allianz will move core pieces of its global insurance platform, Allianz Business System (ABS), to Microsoft’s Azure cloud and will open-source parts of the solution’s core to improve and expand capabilities.

Syncier will offer a configurable version of the solution called ABS Enterprise Edition to insurance providers as a service, allowing them to benefit from one of the most advanced and comprehensive insurance platforms in the industry, reducing costs and centralizing their insurance portfolio management. This will increase efficiencies across all lines of insurance business, resulting in better experiences through tailored customer service and simplified product offerings. 

“Teaming up with Microsoft and leveraging Azure’s secure and trusted cloud platform will support us in digitalizing the insurance industry,” said Christof Mascher, COO and member of the Board of Management of Allianz SE. “Through this partnership, Allianz and Syncier strive to offer one of the most advanced Insurance as a Service solutions on Microsoft Azure. The ABS Enterprise Edition is an exciting opportunity, both for larger insurers needing to replace their legacy IT, and smaller players – such as insurtechs – looking for a scalable insurance platform.”
“Allianz is setting the standard for insurance solutions globally,” said Jean-Philippe Courtois, EVP and president, Microsoft Global Sales, Marketing & Operations. “Together, Microsoft and Allianz are offering a solution that combines Allianz’s deep knowledge of the insurance sector with Microsoft’s trusted Azure cloud platform. By delivering an open-source, cloud-based insurance platform and software application marketplace, we will support innovation and transformation across this sector.”
Syncier’s ABS Enterprise Edition can handle insurance processes across all lines of business: property and casualty, life, health, and assistance. It can be customized for any insurance company, country and regulatory requirements. Insurers, brokers and agents adopting the platform can service clients and manage entire portfolios end to end in one system, gaining a unique 360-degree view of each client and the business.
To accelerate industry innovation, Syncier will also offer an Azure cloud-based marketplace for ready-made software applications and services tailored to the insurance sector. Such solutions could include, for example, customer service chatbots or AI-based fraud detection. The marketplace enables insurance providers to easily and quickly implement the available solutions in a plug-and-play manner.
Allianz uses ABS globally as a platform for all lines of business and along with Microsoft is committed to supporting the ABS Enterprise Edition long term as an industry solution. Today, ABS handles around 60 million insurance policies in 19 countries and is being rolled out to all Allianz entities.