The European Convention Center auditorium was full on Thursday 25 November for the evening seminar, which was the third part of the Aca Insurance Days 2021 conference, and which closed in phygital format. More than 800 registrants were able to follow the panels online, at the same time as the 300 or so people present in the room. Inga Beale, former CEO of Lloyd’s London, gave a high quality presentation on the risks one is capable of taking as a manager, but also as a private person, recruiter, parent or citizen.
Marc Hengen, managing director of Aca, introduced the evening with figures indicating that, despite the exceptional climatic hazards of 2021, the sector has recorded record profits. The life sector recorded a 42% increase in premium income (it was at -25% in 2020), the non-life sector an 11% increase (compared to 5% in 2020) and total premium income for the 2021 financial year was €38bn (compared to €30bn in 2020 and €40bn in 2019. He also announced the arrival of four new companies, which will bring the Aca’s membership to 141.
Calling for better regulated insurance
On several occasions, Hengen and Marc Lauer, chairman of Aca and CEO of the Foyer Group, have pointed to successive “waves” that have swept through the industry. Ironically, this was not about the covid crisis, but rather about the regulatory waves that the sector has “been subjected to” for several years and that have become more pronounced since Brexit, which has been accompanied by a significant influx of companies that have chosen to base operations in Luxembourg. This was not meant to question the principle of regulation of insurers, which seems to be unanimously supported by all professionals, but the number of directives and above all their implementation.
“I want strong, consistent and effective regulation. But I want better regulation rather than more and more regulation”, Lauer stated. The group’s chairman referred in particular to the update of Solvency II (2012), a European rule that will be transformed into Solvency II.2 in 2022, denouncing “an assembly of inconsistent rules that harm the competitiveness and agility of companies”. The same applies to Priips and the Insurance Distribution Directive, which are supposed to inform and protect insurance policyholders: today, policyholders have dozens of pages of “general conditions” to read and sign before committing themselves, which makes the formalisation of the contract uninviting.
In a championship, teams play by the same rules. In supplementary health insurance in Luxembourg, this is not always the case.
In Luxembourg, the insurance sector is regulated by an independent authority, the Supervisory Authority for the Insurance Sector (CAA), which in turn reports to the European Insurance and Occupational Pensions Authority, its European counterpart. The chair of the CAA, Thierry Flamand, seated in the front row next to finance minister Pierre Gramegna (DP), did not miss the message sent by the Aca. “You live with regulations, we live with them, but we don’t live for them,” he said by way of justification.
Four wishes and a triangle
Lauer, having set out the problem, publicly formulated four wishes to the minister of finance.
Firstly, the preservation of the single European market, which today does not offer enough freedom and which, he argued, should favour cross-border activity “otherwise 13,000 Luxembourg companies will have no development prospects”. His second wish concerns the professional secrecy of insurers, introduced in 1991 and revised in 2018. One text provides for a ban on cloud storage outside Luxembourg, while the profession is becoming increasingly digital and has to deal with a growing volume of data. He then summed up his plea on the regulatory waves by calling it “goldplating”.
Finally, his fourth wish concerned the application of the rules of the game: “In a championship, the teams play by the same rules. In supplementary health insurance in Luxembourg, this is not the case.” This gnashing of teeth, which irritates the entire profession, refers to the mutual insurer CMCM, which is not subject to the Solvency II regulations.
Gramegna listened attentively. He did not reject the observations, but he did not promise anything either, insisting rather on the need to maintain the balance in the triangular transition: sustainable, digital, but also financial.
The evening ended with the presentation of the Aca Insurance Innovation Award to the Hokus platform, a startup that connects insurance companies and banks.