FOREWORD

As the current European Commission and Parliament mandates are expiring, I’m reflecting on the range of challenges and accomplishments that have shaped the past five years from the perspective of Insurance Europe’s members and the Insurance Europe team.

Undoubtedly, this period has been marked by momentous and largely unforeseen events, such as the global COVID–19 pandemic and the Russian invasion of Ukraine. These were followed by an energy crisis and severe supply chain disruptions, leading to a period of sudden and high inflation, which came right after some of the lowest interest rates ever seen in many markets.

These events have significantly influenced the current European Commission agenda, pushing it far beyond its initial focus on digitalising and “greening” the European economy. All in all, the Commission has launched an unprecedented number of new proposals, many of which are directly affecting the insurance sector. Most of these proposals are horizontal, covering a variety of sectors, and they often do not reflect the specific characteristics of insurance and the unique benefits of our sector. This is worrying because regulation that ignores insurance specificities can undermine insurers’ ability to play their role for customers, businesses, and society. For insurers, this regulatory avalanche has also meant having to navigate an intense regulatory agenda amidst an increasingly difficult operational environment.

A regulatory avalanche

During this Commission mandate, it has also become apparent that the importance of data access and use by insurers, and its benefits in terms of risk prevention and addressing protection gaps, is not always (fully) understood by policymakers and civil society. Here are some illustrative examples:

• Even when there is a clear recognition from the Commission of the benefits of letting the customer decide whether to share their data, for example in the case of in-vehicle data, we are still awaiting their concrete proposals. Without these, the data remains largely in the hands of car manufacturers instead of the driver.
• There are unfortunate regulatory constraints for the use of secondary data, for instance in the European health data space.

Despite the numerous challenges, Insurance Europe has performed well over the past few years, and we have thus laid a solid foundation on which we can continue to build moving forward.

“Regulation that ignores insurance specificities can undermine insurers’ ability to play their role for customers, businesses, and society.”

Increased political recognition of our sector’s vital role and its contribution to achieving wider EU objectives

A key example is our engagement in the Solvency II review. Insurance Europe has consistently emphasised the need for improvements and their link to insurers’ investment capacity and ability to fund Europe’s sustainable transition. We provided strong technical evidence and arguments throughout the legislative process and responded to enquiries by co-legislators. The political agreement ultimately includes some significant improvements in terms of capital, volatility, and proportionality. We have also seen an increased political recognition of our sector’s vital role and its contribution to achieving wider EU objectives. Of course, this is not the end of the story, and the devil will be in the detail to ensure the technical provisions in the Level 2 measures fully reflect the same high level of ambition.

Climate change and sustainability

A fundamental topic during this Commission’s mandate has been climate change. While the insurance industry has long voiced concerns about the effects of accelerating climate change, its reality has become particularly apparent in the last 12 months, with temperature records being broken every month. This will, undoubtedly, translate into even more frequent and severe weather events, and underscores the need to accelerate efforts towards climate mitigation and adaptation. To achieve this, it is key to trigger action, both at national and EU level. In this regard, I appreciate the Commission's initiative to launch a Climate Resilience Dialogue (2022–2024), and the opportunity for Insurance Europe to play a key role in it. This pivotal initiative, aimed at reducing climate protection gaps, can really make a difference.

Furthermore, sustainable finance and sustainability reporting emerged as clear priorities for the EU institutions and the industry alike, with a remarkable level of ambition and joint recognition of the need to make urgent progress. From the outset, when the first European Commission Action Plan was published in 2018, Insurance Europe has contributed constructively to the Commission’s bold objectives. Fast-forward six years and we now have a number of new pieces of legislation in place in Europe, which I hope can help make a difference – the EU Taxonomy, Sustainable Finance Disclosures Regulation (SFDR), Corporate Sustainability Disclosures Regulation (CSRD), European Single Access Point (ESAP), EU Green Bond Standard, Corporate Sustainability Due Diligence (CSDDD).

“I also welcome the commitment by Commission President von der Leyen to reduce the reporting burden on European companies by 25%.”

A lot has been achieved in this area, but there are important details that need improving and the aggregate volume of requirements needs streamlining. Therefore, I am grateful for the Commission’s recognition of the fact that some of the new rules should be reassessed (e.g. with the planned review of the SFDR). I also welcome the commitment by Commission President von der Leyen to reduce the reporting burden on European companies by 25%. These are positive signals, but the Commission has to deliver on this.

In terms of other positive signals, Insurance Europe has welcomed the Commission’s objectives to increase consumers’ participation in capital markets through a retail investment strategy (RIS). While the proposals helped to make the distribution regulatory framework fit for the digital age and to increase financial education, some of the proposed rules were unfit for insurance. They would have in fact restricted consumers’ access to advice and insurance protection at a time when addressing the protection gap is a major challenge for our continent. We strongly engaged in the discussions and continuously explained the unique features and benefits of our products and how they are instrumental in encouraging people to invest. The proposals were already significantly improved and while the discussions are set to continue under the new Commission’s mandate, we will undoubtedly need to continue our efforts to ensure the final framework is suitable for insurance products and consumers.

Digitalisation and cybersecurity risks

Among the many initiatives in relation to digitalisation, the Commission can be commended for its efforts to enhance cyber resilience. This includes the Digital Operational Resilience Act (DORA), targeting the financial sector specifically. I am happy that our key messages were taken on board on the need to reflect the diversity of the financial sector and that the final framework should be proportionate and risk-based. Insurance Europe will continue its proactive and constructive approach at Level 2.

Other significant regulations in the digital area on which Insurance Europe has proactively engaged, include the Artificial Intelligence Act, the Data Act, and the Financial Data Access Framework (FIDA), where negotiations are still ongoing. Our aim has been and remains to ensure that the final regulation creates a level playing field and does not hinder innovation.

Improving lives in retirement

A topic close to my heart is pensions, as I am convinced that insurers can make a real difference in improving people’s lives in retirement. To better understand Europe’s citizens’ expectations, Insurance Europe has launched a series of representative pan-European pension surveys. Interviews were conducted each time in around 15 member states with almost 50 000 citizens being quizzed about their pension preferences in the three iterations that were organised to date. They give insights into how citizens are looking at pension priorities and planning, enabling Insurance Europe to communicate to policymakers the actions needed to ensure pension adequacy for all. The surveys hold particular significance as we continue to search for solutions, especially following the failure of the pan-European personal pension product (PEPP) Regulation.

At the end of my mandate my sincere thanks go to all Insurance Europe members for their strong support and trust. I also would like to thank the entire team of Insurance Europe for the excellent cooperation, especially its Director General Michaela Koller. In the last six years, I had an opportunity to observe first-hand the commitment and professionalism of the entire team in explaining the insurance sector’s unique business model and the value of insurance. The team is clearly passionate about the European idea and there is a strong dedication to represent the insurance sector in all its facets. It is a first-class team that serves its members with strong and solid governance and is Insurance Europe’s greatest asset. I wish all the best to my highly esteemed successor Frédéric de Courtois, an excellent manager and expert within the global insurance industry.