current and future developments a perspective from the cea european conference of the national...
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Current and future developmentsA perspective from the CEA
European conference of the national institutes for professional insurance education
Riga, 10 October 2008
William VidonjaSingle Market & Social Affairs
Source CEA
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1About the CEA
Recent developments & key trends
Social challenges ahead
Consumer-related challenges ahead
Conclusions
European insurance and reinsurance federation, founded in 1953
Committed to creation of favourable framework at European and international level
Through 33 national member associations represents more than 94% of European insurance market by premium income
About the CEA
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CEA’s member associations
33 national member associations:
27 EU Member States
+ 6 non-EU markets
Croatia, Switzerland, Iceland, Norway,
Turkey,Liechtenstein
2 observers
Russia, Ukraine
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Contribution to the economy
App. 5 300 European (re)insurersrepresented by the CEA
Investing more than €7 284bn
Generating premium
income of €1 122bn
Employing 1 million people
European Insurance in Figures
Source CEA
2005 2006 2007
Real Growth (2007/0
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Total premiums
€998bn€1
086bn€1
122bn(+1.2%)
Investment portfolio
€6 541bn
€6 994bn
€7 284bn
(+2.3%)
NB: 2007 data are provisional
Almost 5 300 insurance companies
App. 1 million employees
Decrease in premium growth
European insurers are large institutional inverstors
Concentration of insurance companies
High quality jobs
Stakeholders in the international environment
European Commission
European Parliament
CFO Forum
Council of Ministers
EIOPC
CEIOPS
European Institutions
International institutions
IAISIASBOECD
Insurance industry stakeholders
CRO Forum
PEIF
AMICE ICISA
National insurance associations
Insurance companies Other
stakeholdersRAB
BusinessEurope
BEUCEFAM
Aetc.
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About the CEA
Recent developments & key trends
Social challenges ahead
Consumer-related challenges ahead
Conclusions
Recent developments & key trends
DevelopmentsEnd of the welfare stateWhat about the social dimension of insurance?
‘No‘ to the EU TreatyWhat about the EU citizens?
On-going financial crisisWhat about the consumer?
Impact on EU policyMore ‘social‘ and ‘consumer‘ oriented
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About the CEA
Recent developments & key trends
Social challenges ahead
Consumer-related challenges ahead
Conclusions
Today’s and tomorrow’s social challenges
Discrimination
Social Dialogue
Demography
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ChallengesEC proposal for a Directive on anti-discrimination, July 2008
Age, disability, sexual orientation and religionSocial concerns in relation to insurance: access and affordability
Process: Article 13 EU TreatyEuropean Parliament (consultation)EU Council (unanimity)
CEA’s responseCEA‘s approach: differentiation rather than discrimination
Insurance provision: « Member States may permit proportionate differences in treatment where, for the product in question, the use of age or disability is a key factor in the assessment of risk based on relevant and accurate actuarial or statistical data » - Art 2 para 7
Negotiation of a direct and clear exemption for insurance business
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Discrimination
ChallengesMaintain social peace in the insurance sector
Launch of a formal sectoral committee at European level (ISSDC)Social partners: UNI-Europa / CEA, Amice, Bipar
Foster understanding between employees and employers
Jointly identify EU-wide issues of common interestAgree on common proposals to respond to these issues
ISSDC’s responsesEnlargement project
Promotion of Social Dialogue across the EU
Demography project
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Social Dialogue
ChallengesAttractiveness of the insurance sector
Image of the insurance sectorAttracting and retaining talentsWork/private life balance
EmployabilityQualifications and life-long learningMaintaining employability of the (older) staff and development of individual careers
Exchange of practices, booklet, joint statement
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Demography
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About the CEA
Recent developments & key trends
Social challenges ahead
Consumer-related challenges ahead
Conclusions
Today’s and tomorrow’s consumer-related challenges
Green Paper on Retail Financial ServicesCollective redressIGSDistributionInformation requirements BER
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Green Paper on Retail Financial Services
Green Paper on Retail Financial Services (30 April 2007) focuses on consumers:
Empowering consumers: appropriate redress, financial education, information requirements
Better working of the Internal Market for consumers: fewer barriers, more competition, more choice
Enhancing consumers’ confidence in buying financial services abroad: legal certainty
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Collective redress
ChallengesMain current problem is that consumers with small claims do not obtain adequate redressEuropean Commission (EC) plans to come forward with an EU-wide collective redress system
CEA’s responseNeed to avoid reputational and financial risks related to vexatious claimsDevelop ADR systems’ effectiveness
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Insurance Guarantee Schemes (IGS)
ChallengesEC is assessing the need for an EU approach on IGSTrade-off needed, says OxeraConsumer protection vs costs/ fundingMarket confidence vs moral hazard Competition
Policy options & IGS design options?
CEA’s responsePreference for measures preventing insolvency (SII)Need to analyse other mechanisms in place (AT, NL, etc.)Concerns about effectiveness of EU wide obligation to set up IGS
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Distribution
ChallengesEC is assessing application of IMDEC has examined problem of intermediation provisions within business insurance inquiryhow transparent is relationship between insurance company and intermediary for the client (commissions/fees)?
Solutions vary between Member States
CEA’s responseNeed for a solid stock-taking on current state of playVariety of distribution channelsAvoiding conflict of interest - IMD as starting point
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Information requirements
ChallengesEC‘s Green Paper on Retail Financial Services
Many EU initiatives envisaged for 2008/9 from different DGs, EP and CEIOPS
Focus on the life side: retail investors‘ protection purchasing competing products
CEA’s responseNeed for practical solutions to put the consumer in a position to take appropriate financial decisions
Quality instead of quantity – “simplified prospectus“ / KII
Ease comparability
Raise awareness of the need to address low financial education
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Block Exemption Regulation
ChallengesDG COMP inquiry into business insuranceEC not convinced of extending the current Block Exemption Regulation (BER) when it expires in 2010On-going consultation – EC report by March 2009
CEA’s responseThe BER needs to be renewed:Pro-competitive nature of exempted forms of cooperationThe BER offers a ‘safe harbour’ - legal certainty
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Block-exempted forms of cooperationJoint calculations, tables and studiesStandard policy conditions (SPC)PoolsSecurity devices
Valid until 31 March 2010
The BER is under threat
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Block Exemption Regulation
Block-exempted forms of cooperationFoster competition
- Benefit to small/ medium-sized insurers & new entrants - Positive effect on cross-border competition
Promote customers’ interests- Specifications facilitate consumers’ mobility- SPC permit comparability of products - Pools allows insurability
BER’s benefitsOffers a ‘safe harbour’
Provides legal certainty
Avoids divergent interpretations of antitrust regulation
Without the BER: risk seeing cooperation cease due to prudence & benefits of horizontal cooperation will be lost
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Block Exemption Regulation
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About the CEA
Recent developments & key trends
Social challenges ahead
Consumer-related challenges ahead
Conclusions
Conclusions
CEA is highly engaged in EU internal market and international debates
CEA supports a better regulation approach to proposed legislation
CEA very much values its contacts and dialogue with other stakeholders
Some challenging debates lie ahead
The ’consumer’ and ‘social’ trends are two major challenges ahead for the insurance sector
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CEA publications
CEA Annual Report
European Insurance in Figures
European Motor Insurance Market
Reducing the Impact of Climate
Change
The Environmental Liability Directive
Solvency II publications
For more information www.cea.eu
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CEA aisblSquare de Meeûs 29B-1000 Brussels