While European insurers are more than ready to go digital, there are still many obstacles to overcome before new cross-border retail insurance products can be created, said Insurance Europe (IE), the European insurance and reinsurance federation, in its response to the European Commission’s (EC) Green Paper on Retail Financial Services.
The insurance sector in Europe has eagerly embraced digitalisation in order to address consumer demands, leading to increased benefits to policyholders, including more efficient claims-handling, easier customer identification and increased comparability of products.
Expansion of cross-border insurance should be market-driven
However, IE noted that while the objective of offering consumers and businesses more opportunities to move and operate within the single market is welcome, the expansion of cross-border insurance within the EU should remain market-driven.
Ms Michaela Koller, Director General of IE said: “The design of insurance products reflects the market and regulatory conditions of the country in which they are sold, which in turn influences the risk a particular policyholder represents. Therefore, premium comparisons between member states should only be done with great care. The need to adapt products, including the claims-handling process, to a particular market also explains why not all companies decide to operate in various markets.”
Suggestions on what more EC can do
IE included in its response several areas where action by the EC would be welcomed. These included the creation of policies to give consumers the power to decide who they can share their data to, and for what purposes; promotion of an open model that ensures fair competition and open choice for customers; development of an EU-wide compliance standard for e-ID providers to securely verify consumers’ identity; and raising awareness of FIN-NET, a financial dispute network of national out-of-court complaint schemes in the European Economic Area countries.
The company also highlighted the need to maintain industry support for consumers who have trouble adopting new digital services. Due to the industry’s evolution towards a multichannel approach, IE said that regulatory initiatives should not favour one channel over the other, in order to avoid financial exclusion.