The ACA Insurance Day 2025, held on Thursday 27 November, chose to start with the hard stuff: competitiveness, regulation and geopolitics. Opening the 13th edition of the event at the Kirchberg conference centre, ACA deputy CEO set the scene for a Europe in the throes of regulatory housekeeping. “Simplify, simplify, always simplify more, that's the political mantra of the moment,” she launched, referring to the promise of administrative simplification in Luxembourg, President Javier Milei's “chainsaw” in Argentina and the “omnibus” legislative texts erected as the European Commission's new weapon.
“Less red tape, more competitiveness. Even if it means radically simplifying legislation.” But, she warned, “by dint of making and unmaking laws, we end up losing what was the strength of the European project: legal certainty - and without it, no investment”.
To shed light on these tensions, the panel featured Nicolas Mackel, Luxembourg's Permanent Representative to the European Union, , independent director and former president of Fedil, , CEO of Axa Luxembourg and Axa Wealth Europe, and , CEO of Utmost Luxembourg, all four interviewed by Valérie Tollet.
If we want to spend all this money on defence, we also need to generate money to be able to do so. And the only way [...] is by improving our competitiveness as a continent and as a European economy.
The balance of power on raw materials and energy
From Brussels, Nicolas Mackel placed the debate in a turbulent geopolitical context. “On 20 January, a new American president took office and, since then, the centre of gravity of the discussions has shifted slightly.” Ukraine, the Middle East, defence: security issues have taken precedence over everything else. “We live more and more in a world where what really counts is strength and power. And we don't have that strength. Hence the commitment made at the Nato summit to increase defence spending. For him, the link with economic competitiveness is direct: “If you want to spend all that money on defence, you also have to generate the money to do it. And the only way we will be able to generate money is by improving our competitiveness as a continent and as a European economy.”
At the Luxembourg level, Michèle Detaille insisted on a point considered essential by companies: “Stability is hyper important.” The trade agreement reached with the United States on customs duties does not make Luxembourg’s industry more competitive, she acknowledged, but it does bring visibility. In passing, she was delighted that aviation and space had been excluded from the surtaxes.
Above all, the current crisis has, in her view, revealed “where the real levers were”. She recalls the years when Europe “tried to dictate morality to the whole world” with sustainable supply chains: “We were inoculated with that for years.” Now it's the balance of power around raw materials and energy that dominates. “We're in a world where it's the balance of power that rules. For a small country like Luxembourg, the former Fedil president argues for intelligent alliances: “Small countries have an interest in talking to each other, because several small countries become a medium power.”
Instability, a business driver
As far as insurers are concerned, instability is not necessarily bad news for business. “The more geopolitical instability there is, the better it is for business,” Jurgen Vanhoenacker summed up bluntly. Conflicts, budgetary tensions, drones: all this “creates anxiety and uncertainty”. In this context, “for an investor or a subscriber, what you have to do is try to anticipate, to plan. We are in the business of planning.”
He observes, in particular, a marked behaviour among entrepreneurs: "They prefer to secure a large part of their private assets in insurance solutions in order to have a bit of an empty head, 'peace of mind', to concentrate on their business." According to the CEO of Utmost Luxembourg, the recent rise in inflow figures in the marketplace reflects this dynamic.
Market volatility, fuelled by this climate, is also driving investors to diversify. "Our subscribers are trying to decouple themselves from the traditional financial markets," he observes. The inclusion of unlisted assets and private markets in Luxembourg contracts is rising sharply, he believes. He praises the contribution of the ACA's working group with the BCL on these issues: "This is really becoming a skill, an expertise of the financial centre. [...] It's a card to play."
Defence should have been a prerequisite for ESG.
ESG and defence are not immune to reorganisation. Octavie Dexant points to "a shift in the centre of gravity of investment priorities". "With the American elections, the ESG issue may have found itself a little out of step with others. We see the defence issue coming up, and a growing awareness of the importance of European sovereignty." As a result, customers' investment appetites are changing. Michèle Detaille, who is more forthright, believes that "defence should have been a prerequisite". "If there's a war, there's no more E, no more S, no more G,” she says, criticising "the high priests" of an ESG that is out of touch with reality. She is also concerned that, on certain votes in the European Parliament, "the centre parties are completely absent from this new way of thinking". So much so that she finds herself closer to certain far-right positions, which "really bothers her".
15 years ago, a subscription form was 30 to 35 pages long. Now, [to] find a newsletter under 100 pages, good luck."
On the business side, the feeling is less optimistic. "I can confirm that," says Jurgen Vanhoenacker, when asked about overregulation. "When I look at the amount we spend every year, our IT budget, to comply with regulations, we're talking about +40%. That's millions every year that we invest just to be compliant." And he insists that the problem lies mainly with the regulations in the distribution countries, not just in Luxembourg. He points to national over-layering, incessant changes to reporting and documentation, from the Pacte law in France to the proposed capital gains tax in Belgium.
His "barometer" of regulatory drift speaks for itself: "15 years ago, a subscription form was 30 to 35 pages long. Now, [if] you want to find one that's less than 100 pages long, good luck.” Hence the "paper paradox": these hundreds of pages are supposed to inform and protect the consumer, but "if we're honest, 90% serve to protect us". The result: "We've reached a point where even professionals are barely able to understand. It's mind-boggling."
For Octavie Dexant, two factors in particular are hampering the competitiveness of Luxembourg insurers: professional secrecy and indexation. The first makes it very difficult to become part of an international group. "I'm not able to answer when my group asks me if I insure such and such an international company so that we can have a global approach. I don't have the right to answer. Data cannot leave the company or financial service providers (FSPs), which prohibits the use of shared infrastructure or tools at group level. "Our group operations cover entities throughout the world, with the exception of Luxembourg.” The result: local infrastructure, duplication of tools, and difficulty in using cloud-based artificial intelligence solutions. "You can't be a pioneer when you have to systematically recreate everything and reinvest. We don't have the scale, we don't have the speed."
Barriers, an additional 100% customs duty
The discussion then shifted to the issue of protectionism and the European single market, against the backdrop of the Draghi report. Valérie Tollet points out that "the protectionism of EU Member States aimed at protecting their national companies is weakening the single market and holding back innovation", with concrete barriers in key markets for Luxembourg insurance, such as Italy and Belgium. Nicolas Mackel admits that this is "a fact": "We have an internal market that functions reasonably well, but which continues to experience a degree of fragmentation."
Since the financial crisis and the pandemic, governments have rediscovered their protectionist reflexes. The ambassador also points to a relaxation of the European Commission in its role as guardian of the Treaties: "It has reduced the number of infringement proceedings by 60% over the five years of its first term of office.” For him, it should come as no surprise that Member States have "acquired a taste" for erecting barriers. Citing an IMF study, he points out that all these barriers amount to imposing "a customs tariff of more than 100%" on the single market itself. His recommendation to the sector is clear: "You must use the channels you have, the associations and federations, to pass on complaints and examples."
Michèle Detaille again illustrates the perverse effects of certain national measures. She cites the formalities imposed on foreign manufacturers who come to install machinery in Luxembourg: authorisations, medical examinations, cumbersome procedures. "These people don't want to come any more.” In the long term, she warns, this can prevent sensitive medical equipment from being updated or discourage certain suppliers: "They tell you: 'We won't sell to you in Luxembourg because it's too complicated to work in your country'." She advocates "removing as much as possible all these regulations that are of no interest to the economy and that prevent entrepreneurship".
Insurance, an infrastructure for growth
Against the backdrop of all these debates, a more fundamental issue is emerging: the value proposition of insurance compared to other investment products. "We have a conceptual problem," admits Jurgen Vanhoenacker. According to an in-house study carried out with NMG, which he cites, the upper affluent and high net worth segment represents around €30,000 billion of financial assets in Europe, for around €650 billion of assets housed in cross-border insurance solutions. "Roughly 2%. [...] The pie is gigantic.” Yet, in his view, insurers tend to "compete among [themselves]" on too small a share.
Insurance must remain one of the engines of growth and competitiveness in the Luxembourg of tomorrow.
The ignorance of other players in the value chain is blatant, he recounts: "At the LPEA private equity conference, when I introduce myself, people look at me: 'But what's an insurer doing here?'" The CEO of Utmost Luxembourg argues for a massive education effort, via the ACA, Luxembourg for Finance and each player individually, to demonstrate the relevance of the "insurance solution" in wealth structuring.
For Octavie Dexant, insurance is more than a financial product: it is an infrastructure for growth. "It's what makes the economic fabric work," she says. Insurance allows entrepreneurs to take risks, businesses to manage unforeseen events, and the population to evolve in an environment of protection deemed crucial to the country's attractiveness. "We need this population to drive growth. [...] We need a place where it's good to live, where we have a private insurance system that works with the public system and provides the right level of protection."
In conclusion, the four speakers were asked to deliver their forward-looking vision in one sentence. "Europe in 2025 has come a long way, gained in maturity and is working on the points where it needs to strengthen itself,” says Nicolas Mackel, convinced that 2025 will be seen, in a few years' time, as "a pivotal year in the construction of Europe". Michèle Detaille simply hopes that "in the years to come, we will be able to say: Luxembourg is doing well because it has become the country of excellence". Jurgen Vanhoenacker, for his part, is already looking ahead to November 2030: “On that day, there will be an article in the Financial Times saying: 'Luxembourg cross-border business, number 1'.” As for Octavie Dexant, she comes full circle: "Insurance must remain one of the engines of growth and competitiveness in the Luxembourg of tomorrow."