Competitive resilience

Supporting the international competitiveness of the EU (re)insurance industry


Insurance is a global business. And reinsurance — insurance for insurers — even more so. Indeed, it is vital for the (re)insurance business model of spreading risk that this is the case; concentrating risks geographically can be economically dangerous.

To compete to their full capacity in such a global market, European (re)insurers need:

  • appropriate European regulation;
  • any global standards to be robust and of high quality; and,
  • the right trade conditions to enable them to access markets around the world.

“A third of all internationally active insurance groups are headquartered in the EU.”


The European (re)insurance industry is the world's most international (re)insurance sector. Today, around a third of all internationally active insurance groups are headquartered in the EU. And Europe is the global leader in reinsurance, writing around half of the world's reinsurance business and making Europe's (re)insurers a global success story.


The European Commission of Ursula von der Leyen has identified “A stronger Europe in the world” as a key ambition in its EU policy agenda for 2019-2024. This is not only fully supported by the European (re)insurance industry but is also fully aligned with the industry's potential, capacity and desire to leverage its longstanding business experience and strength and to further pursue business opportunities outside the EU. A stronger European (re)insurance industry on the world stage makes Europe stronger too.


“Global competitiveness should be a clear objective when making EU policy.”


Europe's global leadership is an ambition that is shared by both the public and the private sector. Global competitiveness should therefore be a clear objective when making EU policy.

Consider global competitiveness when assessing EU regulation

Sound and trusted EU regulation is vital for European industries to be able to thrive at home and abroad. This is particularly true for a business such as insurance, which is built on trust. And that regulatory environment must also allow European businesses to maintain their global competitiveness and their ability to contribute to the EU objectives of sustainable, innovative and inclusive growth.

Regulation at home is very important when conducting business abroad, especially when the European industry is regulated by the most sophisticated risk-based regime in the world: Solvency II. The European industry supports that strong, risk-based regime with its very high levels of consumer protection, but the excessively high requirements of the Solvency II framework damage the ability of the industry to maintain and grow its international presence. Internationally, European (re)insurers compete with companies that follow regimes that differ greatly from Solvency II. Solvency II's unnecessarily high conservativeness thus damages their global competitiveness. Other jurisdictions appear to have taken much greater account of the special characteristics of insurers' long-term business model, as well as their economic and social goals, in the design and calibration of their regulatory frameworks.

In the current review of the Solvency II framework, EU policymakers must include the objective of ensuring international competitiveness alongside their objectives of policyholder protection and financial stability.

Ensure global standards create a level regulatory playing field

The (re)insurance industry strongly supports the EU's efforts to promote Europe's competitiveness and to ensure that its companies operate on a level playing field when doing business globally.

The International Association of Insurance Supervisors (IAIS) is currently developing a global insurance capital standard (ICS) to enhance the convergence of capital standards for insurance groups. This long-term process continues to require significant effort and resources from supervisors and the industry. Insurance Europe supports the ICS project on the condition that it leads to a high quality and robust global standard to which all major jurisdictions are committed. The ICS should only be considered for implementation in Europe if this is the case — otherwise European groups that operate internationally could be placed at a competitive disadvantage to their non-European peers.

There are still a number of important improvements that need to be made to the ICS framework for it to become eligible for consideration in Europe, such as allowing companies to use their bespoke “internal” risk models as well as standard models.

The IAIS is working on a comparability framework for the ICS. It is vital to have clear comparability criteria that ensure the same level of policyholder protection in each framework. European supervisors involved in the project must negotiate on the basis of the Solvency II discussions as they develop the ICS. And EU policymakers must ensure that an improved version of Solvency II ultimately becomes the European implementation of the ICS.

Seek to remove market access and trade barriers

The European (re)insurance industry has the interest and capacity to further expand internationally. However, (re)insurers need the right trade conditions and they continue to face a variety of market access and trade barriers: restrictions on foreign ownership of companies; barriers to the establishment of operations; barriers to cross-border provision of services; and discriminatory and anti-competitive mechanisms.

Currently, the Global Reinsurance Forum has identified 51 major territories, including regional groupings, that have either implemented or are in the process of implementing or are considering implementing barriers to the transfer of risks through global reinsurance markets.

There has been a significant increase in cases of such barriers in all regions of the world in recent years. Examples include: a broad range of discriminatory requirements and restrictions in China; the current review of Canada's regulatory framework, which includes several potential threats to foreign reinsurers that conduct business on a cross-border basis; and Indonesia, which prohibits the placing of certain reinsurance offshore and restricts how Indonesian insurers place their risks.

These barriers need to be addressed by European policymakers in their engagements with foreign counterparts. There is significant potential for the EU to further strengthen the global leadership of its businesses via its trade negotiations and agreements. EU policymakers must target cases of protectionism and discriminatory trade barriers and must prioritise ambitious trade negotiations that lead to more global opportunities for EU businesses.