Dr. Manuela Zweimüller, Head of Policy Department at EIOPA, has delivered a speech on what will the future hold? The European insurance industry in times of major disruption.
The speech highlights challenges in respect of InsurTech, Brexit and Regulatory stability. EIOPA considers that the insurance industry needs to reinvent itself in respect of InsurTech and digitalisaton as they have the potential to significantly reshape the insurance landscape in the coming years.
EIOPA’s immediate work in the area of InsurTech will focus on three main issues:
- the use of Big Data by the insurance industry, including ethical standards;
- cyber risks; and
- supervisory approaches to financial innovation – initiatives such as regulatory sandboxes and innovation hubs.
With regard to Brexit challenges, EIOPA explains that a detailed analysis as to the duration and nature of the contracts that are being sold by UK insurers into the EEA is required before drawing final conclusions. For UK insurers relocating, EIOPA reiterates that it will not accept characteristics of empty shells and supervisors should carefully scrutinise any transfer of risks and require a minimum retention of risks from the authorised undertaking. EIOPA envisages a minimum retention of 10 % of the business written.
EIOPA expects to deliver a first set of advice to the European Commission by the end of October on the review of the Solvency Capital Requirement. Also in relation to regulatory stability, EIOPA supports the development of a robust version of an international capital standard by the end of 2019.