INTERVIEW: Michaela KOLLER, Director General, Insurance Europe

XPRIMM: Bucharest is the proud host of the 11th edition of Insurance Europe's International Conference. What were the criteria for choosing Romania?

Michaela KOLLER: We are delighted to be holding the 2019 International Insurance Conference in Bucharest. 

It is a historic moment, as it is the first time the conference will be held in a central European country and comes as Romania holds its first ever presidency of the Council of the EU.

In terms of how the decision was made, the whole process begins when our members volunteer to host the event and present their proposals to Insurance Europe's executive committee. These proposals include the level of support that markets can bring, and the reasons why other markets might find it interesting to visit. Our Romanian member, UNSAR, presented a great bid and we decided to organise the event 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?

M. K.: The conference will cover a range of topics that are key for our industry.
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?

M. K.: Our role is to represent our members - the national insurance associations - to policymakers and regulators in Europe and at an international level. We work with our members to achieve effective and efficient regulation. Through our members, we represent 95% of total European premium income. Therefore, we are truly the voice of the European insurance industry, including all types of insurers.


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?

M. K.: There are many important regulatory developments, including the European Commission's work on the Capital Markets Union (CMU), sustainability and the accounting standard for insurance - IFRS 17.  However, if I had to pick two reviews of existing regulation that are particularly important, I would choose the current Solvency II review, due by the end of 2020, and the packaged retail investment and insurance products (PRIIPs) review, due to begin this year.

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?

M. K.: This is an incredibly important topic and I'm glad that it will be discussed at one of the breakout sessions at the conference. I know it is also a subject that Alexandru Ciuncan, Director General of UNSAR, has contributed much towards in Romania.

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.


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