INTERVIEW: Michaela KOLLER, Director General, Insurance Europe
Michaela KOLLER: We are delighted to be holding the 2019 International Insurance Conference in Bucharest.
XPRIMM: The title of the 11th Edition is Fast Forward - The future of the insurance. What kinds of issues will be discussed at the event?
These include the future of our industry, protecting sustainable societies and making regulation fit for the future. We will also have breakout sessions on financial education for the 21st century, coping with changing natural catastrophes and dealing with cyber insurance. You can register for the 11th International Insurance Conference here.
XPRIMM: How would you characterize the role that Insurance Europe plays at European level? How do you support the activity of the national associations?
XPRIMM: UNSAR is celebrating 25 years of activity. How would you characterize the collaboration between Insurance Europe and UNSAR?
M. K.: UNSAR is a valued member of Insurance Europe, and we have a strong and constructive relationship with them. By bringing together different players in the European insurance industry, we provide the opportunity for UNSAR to exchange ideas with other associations and, by working together towards good regulation, we can all achieve so much more.
XPRIMM: Taking into account the already existing legislative framework, what are the main necessary reviews from the industry point of view?
Solvency II is the set of rules on capital requirements, risk management and reporting for European insurance companies which ensures very strong consumer protection. It is probably the most sophisticated framework in the world and sets very high standards of governance, risk management and reporting. However, there are some very important improvements that are needed. The problem is that Solvency II treats insurers like short term investors, when they are not. This leads to capital requirements that are too high in relation to the real long-term risks faced by insurers, which damages insurers' ability to offer certain products and invest long-term. As our industry is Europe's largest institutional investor, with over €10 trillion in assets, policymakers must get this right for the economy, as well as for customers.
The PRIIPs Regulation introduced harmonised 'key information documents' (KIDs) for all insurance-based investment products. While PRIIPs entered into force in January 2018, there are still major questions over its usefulness in ensuring high quality data is provided to consumers. This is primarily because the Regulation is very prescriptive and allows little flexibility, while trying to capture a very broad range of products.
As such, too often the specific characteristics of insurance products are not captured by the detailed rules specifying the content of the KID. The PRIIPs review should address issues with the presentation of performance, risk, insurance features and the treatment of products with several underlying options to ensure insurers can provide meaningful information about their products to consumers.
XPRIMM: One of the solutions for increasing the penetration in the Central and Eastern Europe is financial education. What recommendations would you offer the national associations, authorities and other stakeholders in this respect?
Financial education has a vital role to play in ensuring that European citizens are equipped with the knowledge, confidence and skills necessary to improve their understanding of financial products and concepts.
It is a core life skill that needs to be developed early, at school even, to encourage responsible financial behaviour and to engender the necessary basic knowledge and confidence to take charge of one's own financial future.
The European insurance industry is engaged in a wide range of initiatives to increase people's financial literacy and understanding of insurance. A selection of these initiatives can be found at our website, here.