Call for EU rules to help competitiveness of European insurers

Insurance Europe has called for EU rules and trade policy to help, not hinder, European firms’ global competitiveness. In its response to a consultation conducted by the European Commission (EC) on its review of EU trade policy, Insurance Europe says the EC should consider global competitiveness as a clear objective in EU policymaking. The response notes that about a third of all internationally active insurance groups are headquartered in the EU, and that Europe is the global leader in reinsurance. “The EC vision on trade and competitiveness of the EU in the world is very relevant for the sector,” it states. “In a tough economic environment and fast-changing world, Europe’s (re)insurers need the right EU and international regulatory environments to be able to maintain their competitiveness on the world stage. They also need the right trade conditions to enable them to access international markets.” The insurance industry in Europe has set out four proposals. Firstly, the EC should consider global competitiveness as a clear objective in EU policymaking. The European insurance industry supports a strong, risk-based regime with very high levels of consumer protection, but the excessively high requirements of the Solvency II framework damage the ability of the industry to maintain and grow its international presence, states Insurance Europe in its response. “Internationally, European (re)insurers compete with companies that follow regimes that differ greatly from Solvency II. Solvency II’s unnecessarily high conservativeness thus damages their global competitiveness. Other jurisdictions appear to have taken much greater account of the special characteristics of insurers’ long-term business model, as well as their economic and social goals, in the design and calibration of their regulatory frameworks,” it states. Secondly, the EC and European negotiators in international agreements should ensure that global standards do not create competitive disadvantages for the European industry. “EU policymakers must target cases of protectionism and discriminatory trade barriers and must prioritise ambitious trade negotiations that lead to more global opportunities for EU businesses,” says Insurance Europe. It adds: “Open reinsurance markets are vital to enable reinsurance markets to operate efficiently, to diversify risk globally and to promote the continued growth and recovery of global and national economies. Barriers to trade in reinsurance – such as limitations to transfer risk and assets abroad – undermine the efficiency of reinsurance markets. They lead to higher reinsurance costs and less capacity in the long term.” Thirdly, the response calls on the EC to engage in dialogues with third-country jurisdictions to ensure that market access and trade barriers to European market players are removed and the strength of the EU regulatory system is appropriately recognised. And lastly, Insurance Europe states that given the global nature of sustainability, policymakers should promote international coordination and a global approach.

Call for EU rules to help competitiveness of European insurers

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