European Union : challenges for the insurance industry

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CEA (European insurance and reinsurance federation)

European insurance and reinsurance federation, founded in 1953

Through 33 national member associations represents more than 94% of European insurance market by premium income

Committed to creation of favourable framework at European and international level

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

More than 5 000 European (re)insurers represented by the CEA

Investing more than €6 800bn

Generating premium income of €1 058bn

Employing 1 million people

Provisional 2008 figures

Stakeholders in the international environment

European Commission

European Parliament

CFO Forum

Council of Ministers

EIOPC

CEIOPS

European InstitutionsInternational institutions

IAISIASBOECD

Insurance industry stakeholders

CRO Forum

PEIF

AMICE ICISA

National insurance associations

Insurance companies Other

stakeholdersRAB

BusinessEurope

BEUCEFAM

Aetc.

Today’s and tomorrow’s challenges

EU supervisionAnti-discriminationPackaged retail investment productsCollective redressBlock Exemption RegulationClimate changeEnvironmental Liability Directive

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EU supervisory architecture

State of play

From Committees of Supervisors to EU Authorities

Creation of a European System of Financial SupervisorsCreation of a European Systemic Risk CouncilChallenge: how to link macro-micro prudential supervision

TimelineEU supervisory package proposals - 23 September 09Amendments to sectoral legislation – November 09System could be in place in 2010

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EU supervisory architecture

CEA position European System of Financial Supervision

CEA support for EIOPA strengthened role & powers Careful analysis pending on practical implications of new powers

European Systemic Risk CouncilInsurance sector requires adequate representationPotential duplication of reporting

Omnibus DirectiveRemains to be seen how...

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ChallengesDraft Directive on age, disabilityGender Directive review

CEA positionRisk assessment : differentiation, not discrimination

Risk of price increase and reduction of insurance offer

No Member States‘ optionsRisk of legal uncertainty

Wide range of relevant sources to justify differences

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Anti-discrimination

Packaged retail investment products

European Commission legislative plans on PRIPs

Horizontal approach and investment-type rules as model for:Mandatory product information disclosureSelling practices... of all packaged retail investment products

Timeline : EC outline of possible content of the legislative measures by end 2009

… And in parallel..MiFID review – end 2009IMD review - 2010

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Packaged retail investment products

CEA positionDisclosure: focus on consumers‘ needs

Quality instead of quantity Understand and compare products

Selling practices: Support fair treatment of consumer / investorThe future regime on advice should focus on the different needs and expectations of retail clients

ChallengeDeep understanding of implications of having MiFID as benchmark for insurance sector

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Collective redress

ChallengesEC preparing impact assessmentIs an EU initiative appropriate and necessary for an identified problem?Benefits of an EU-wide collective redress system for consumers?

CEA positionSupport access to effective redress for consumers but ...Need for EU-wide collective redress system has not been established by ECUse of ADR should be encouragedIssues to be solved: differences in applicable law and jurisdictionIf introduced, design features:“loser pays”principle

opt-incertification criteria 12

Insurance Block Exemption Regulation

State of play and challengesEC’s proposed BER: partial renewal

No renewal: Standard policy conditions + security devices

Renewal: joint compilations, tables and studies + pools

But with redrafting of certain conditions

New BER from 1 April 2010 – until 2017

CEA positionCEA supports full renewal of the BER

CEA welcomes renewal for joint compilations and pools as well as

o Broader definition of “new risks”o Increase of thresholds in case of rise of market share

CEA has strong concerns :o Market share – new calculation restricts the scope o Requirement to disclose the results of joint compilations to third parties upon requesto No transitional period

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Climate change

State of play

EC White Paper on Adapting to climate change2009-2012: first phase � knowledge base� integrating adaptation into EU key policy areas

� employing a combination of policy instruments

� international cooperation

from 2013 � implementation of comprehensive adaptation strategy

New Climate DealDecember 09: signature of Copenhagen agreementmultilateral insurance pool?

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Climate change

CEA position

Creation of a climate risk-strategy frameworkIntegrated risk management strategy by public authoritiesFavouring of ex-ante financing mechanisms and market-driven insurance solutionsPublic-private partnerships

Dissemination of coherent data and good practices

Key concern: consideration of compulsory standard weather-related insurance

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Environmental Liability Directive

State of play

“Polluter Pays” Principle

Commission studies

� Financial Security of the ELD (2008)� ELD Implementation Efficiency and Related Issues (2009)

Commission ELD Workshop

Timeline: Commission report before 30 April 2010

Environmental Liability Directive

CEA position

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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