1213352215 Cea Annual Report Web

CEA Annual Report 2007–2008CEAInsurers of Europe

Annual Report 2007–2008

Annual Report 2007–2008

CEA

The CEA is the European insurance and reinsurance federation. Through its 33 member bodies, the national insurance associations, the CEA represents all types of insurance and reinsurance undertakings, eg pan-European companies, monoliners, mutuals and SMEs. The CEA represents undertakings that account for approximately 94% of total European premium income. Insurance makes a major contribution to Europe’s economic growth and development. European insurers generate premium income of €1 110bn, employ over one million people and invest more than €7 200bn in the economy.

www.cea.eu

ContentsForeword 4

European insurance in figures 6

The CEA’s key dossiers

Solvency II 10

Climate change 13

Competing products 16

Reinsurance 18

Single Market Review 20

European motor insurance 23

IFRS 4 Phase II 26

EC inquiry into competition issues 28

VAT – Insurance and Financial Services Review 30

Compulsory liability 32

Social dialogue 34

The CEA

Events 36

Publications 38

Reorganisation 40

Presidential Council 41

Member associations and presidents 42

Director Generals’ Conference 45

Committee chairpersons 48

Staff 50

CEA Annual Report 2007–2008

The last year has been a turbulent and challenging one for the world’s markets. Nevertheless,

the 27 countries of the European Union achieved GDP growth of 2.9% in 2007, slightly higher

than the 2.2% growth in the US, which has been particularly hard hit by the liquidity crunch

triggered by the problems in the US sub-prime mortgage sector.

European economies have been boosted by growth in internal demand, offset by exports

affected by the strength of the euro against the dollar. Despite the efforts of the central

banks to reduce the impact of the credit crisis, the financial turmoil inevitably affected the

economy in 2007 and continues to do so in 2008, and it looks set to persist into 2009.

The financial sector has borne the lion’s share of the costs of the crisis but, of the various

financial institutions affected, the banks have been hardest hit with first analyses suggesting

that insurance companies will avoid the worst (see p9).

Europe’s insurers, as well as their primary role of providing protection to the continent’s citizens,

also make an impressive contribution to the economy. Our estimates suggest that the total

amount invested by insurers was a staggering €7 283bn in 2007.

The EU’s large (re)insurance groups continue to lead the world in terms of financial strength

and size, while its small and medium-sized insurers remain the mainstay of the industry. The

European insurance market is highly competitive, which largely explains the very small increase

in its total premium income in 2007; from €1 086bn in 2006 to €1 110bn (see p6).

These are challenging times for all financial sectors, not least the insurance market. Amid the

economic challenges, financial services, and within them insurance, also remain a key focus

of the European Commission in its drive to create a better regulated, more integrated single

market. As a result, there are many EC initiatives that require monitoring by and input from

the CEA.

The EC’s Solvency II draft Framework Directive (see p10) has been the key focus of CEA activity

over the last 12 months. We have been working to ensure that Solvency II is a workable risk-

based supervisory system. It is essential that Solvency II is a prudential regime that is suitable for

all EU insurers, irrespective of size, and to that end the CEA’s objective has been to ensure that

the principle of proportionality is appropriately applied in the Directive and that the supervision

of insurance groups accurately reflects their economic reality and allows the efficient allocation

of capital within their organisations.

4

Foreword


5

The parallel development of Phase II of the International Financial Reporting Standards by

the International Accounting Standards Board (see p26) is another important dossier for the

CEA, not least to ensure that there is no conflict between the new accounting rules that are

developed and the Solvency II draft Directive.

Of course, the CEA has been, and continues to be, active on a wide range of other issues. Our

members are conscious of the pivotal role they play in addressing issues such as climate change

and demographic change. Experience in risk-mapping, raising risk awareness and incentivising

behavioural change, for example, have put (re)insurers at the forefront of activities to mitigate

and adapt to climate change (see p13).

The EC’s efforts to improve competitiveness in European markets have brought into question

the insurance Block Exemption Regulation. The CEA has been working to demonstrate the

positive effect of this exemption on the competitiveness of the insurance sector. Meanwhile,

the CEA has been monitoring and contributing to many other initiatives. The EC’s review of

VAT on insurance and financial services (see p30) is just one example.

As well as turbulence in the financial markets, the last year has also been a turbulent one at

the CEA, albeit in a positive rather than a negative way. On page 40 you can read about the

transformation of our secretariat. The CEA is now better able to promote the views of the

insurance industry efficiently and effectively to European and international institutions and the

wider public. We look forward to continuing to represent Europe’s (re)insurers, large and small,

listed and mutual, on the wide range of EU issues that concern them.

Gérard de La Martinière

CEA President

Michaela Koller

CEA Director General


6

Against a background of relatively good economic growth, affected nevertheless by the financial turmoil of the second half of the year, the insurance sector in Europe recorded only a very slight increase in total premium income in 2007 of 0.1% in real terms. This is the lowest growth rate since the significant drop recorded in 2001 and it is mainly due to strong competition between insurers and between the different financial sectors.

Total premium income amounted to €1 110bn against €1 086bn a year earlier, while total insurance industry investments increased by 2.2% to €7 283bn.

Life growth in the east

Total life premiums grew by 0.1% (in real terms) to reach €688bn, against €674bn in 2006. This small increase is made up of two different developments; a decrease of 0.4%

in the 15 old EU member states and a growth rate of over 20% in the 12 new member states. Figures for those central and eastern European countries, which still have a relatively small share of the total life market (around 2.5%), were boosted by economic growth, strong savings growth and the development of occupational schemes.

The decrease recorded in western Europe seems to demonstrate that the market has reached a certain level of maturity (life premium income per inhabitant was close to €1 200 in 2007, against €680 in 1998). It may also reflect the decrease in the saving growth rate in several countries. However, in the context of an ageing population and uncertainty regarding future pension levels, life insurance has potential for growth in several countries. In addition, the disparities in the penetration rate (premium/GDP) and in the ratio of population to premium income

Note:All 2007 figures in this article are provisional data and are subject to change. Growth rates are always inflation adjusted. The complete data for 2006 and basic data for 2007 will be available on the CEA website in July 2008.

European insurance in figures Competition lowers growth in premium income

European insurance premiums and growth — 2006-07

Premium income (€bn) Growth rate (%)

2006 2007 Nominal Real

Life 673.9 688.3 2.1 0.1

Non-life 412.1 421.8 2.4 0.2

Motor 127.7 129.1 1.1 -1.1

Health and accident 121.8 126.0 3.4 1.4

Property 79.8 81.4 2.0 -0.2

General liability 33.3 33.5 0.6 -1.4

Legal expenses 6.5 6.9 6.2 3.3

Marine, aviation, transport 16.3 16.6 1.8 -0.6

Other non-life 26.6 28.4 6.8 4.3

Total 1 086 1 110 2.2 0.1


7

demonstrate that further increases can be expected in several countries.

Little change in non-life

The non-life insurance market grew by 0.2% to €422bn, against growth of 6.2% in 2006 that was due to the privatisation of health insurance in the Netherlands. 2007’s low growth reflects the strong competition between insurers and confirms the soft market already observed in 2006. The insurance cycle, with hard market conditions and rate rises followed by soft market conditions and rate reductions, is mainly seen by economists as an indicator of the strong competition

between insurers. As in life business, this low growth rate concerns almost exclusively western markets, where nine countries recorded negative growth, while eastern markets showed growth of almost 7%.

Tough motor competition

With a 31% share of all non-life premiums, motor insurance is the largest non-life business and is particularly competitive, with more than 1 000 companies competing to sell contracts for around 300 million vehicles in Europe (see p23). Total premium income fell 1.1% (in real terms) in 2007 to €129bn, compared with €128bn in 2006. This is the second consecutive

GREECE

TURKEY

CYPRUS

SWITZERLAND

CZECH REP.

<-5%

-5% - 0%

0% - 5%

5% - 10%

>10%

Premium growth by country


8

year of decline in total European premiums and it reflects insurers’ efforts to maintain and even increase value to customers. In previous years, the decrease or the low growth in premiums has been made possible by the reduction in claims expenditure. Since 2006 this reduction has been less marked and increases pressure on insurers to be even more cost efficient in order to offer further premium reductions. These reductions have been accompanied by a broadening of the insurance on offer to include, for example, pay-as-you-drive and special rates for good drivers and for those driving only a few kilometres.

Variations in health & accident

With premium income of €126bn in 2007, health and accident insurance is the second largest non-life business line. Total premiums grew 1.4% over 2006, concealing variations from falling premiums in several Nordic countries to growth above 10% in many eastern countries. This market is mainly driven by the Netherlands and Germany, which together represent about 57% of the total due to the complete privatisation of health insurance in the former in 2006 and its partial privatisation in the latter. In most other markets, health insurance intervenes mainly as a complement to social security.

Change in property & general liability

Property insurance recorded premium income of €81bn, against €79.8bn in 2006, which represents nominal growth of 2% but a real decrease of 0.2%. This decrease is the first in seven years and reflects the strong competition in both the household and business insurance markets. It contrasts with the increase in building prices, although the latter has slowed down in recent years.

General liability insurance, which is sold to both firms and households, also recorded a real decrease of 1.4% against an increase of 1.4% in 2006. As for other non-life business lines, this drop relates to the strong competition between insurers. However, general liability is characterised by its long-tail nature, which allows insurers to benefit from higher investment income than short-tail non-life markets.

Investment slowdown

The total amount invested by insurers in the economy, estimated at market value, reached approximately €7 283bn in 2007, against €6 994bn in 2006. This represents real growth of 2.2% (4.8% in 2006). This slowdown in investment growth is mainly due to the lack

Note:All 2007 figures in this article are provisional data and are subject to change. Growth rates are always inflation adjusted. The complete data for 2006 and basic data for 2007 will be available on the CEA website in July 2008.

European insurance premiums and growth — 1995–2007

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

0

200

400

600

800

1 000

1 200

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

€bn

Total premium income Growth (inflation-adjusted)


9

of growth in life business, which has also been affected since 2006 by a rise in the benefits paid. Life investments, which represent more than 80% of the total, grew by 2.4%, while non-life investments increased by 1.4%.

Financial turmoil

Turmoil in the world’s financial markets has also slowed the growth in investments. However, insurers’ results and the first studies currently available show that the European insurance industry has not been seriously affected by the financial crisis and that the losses incurred by insurance companies are manageable.

According to a study led by the International Monetary Fund, the total share of the worldwide insurance industry in the cost of the financial crisis should be around 12%, with the vast majority of the costs shouldered by banks, pension funds, hedge funds and other investors. Moreover, this cost will vary by region and first estimates suggest that the European insurance industry will avoid the worst impact.

There are various reasons for this. The need for insurers to cover euro liabilities with euro investments has stopped them investing significantly in US assets. More generally, to

match their investments with their liabilities, insurers invest mainly in products with a financial profile and risk consistent with the financial characteristics of their liabilities. This leaves very little room for speculative investments. Also, the financial crisis of 2001-02 seriously affected insurers, who revised their investment strategy at the time by improving their risk assessment. It is also worth stressing that investment revenue is only part of an insurer’s revenue and so they often prefer to invest conservatively.

However, insurers are affected by the financial crisis in several ways. Firstly, the decrease in the value of assets recorded on most financial markets has reduced the value of insurers’ investments and may for a while decrease the solvency margin of insurers. Secondly, some insurers such as monoline insurers specialised in credit risk cover and directors & officers and errors & omissions insurers may be directly affected by the problems stemming from the US sub-prime mortgage market. Finally, as insurers are often part of a larger financial group, insurance companies may suffer damage to their reputations or be required to provide liquidity to other branches in the group.

European insurers’ investments — 1995–2007

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

1000

2000

3000

4000

5000

6000

7000

8000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

€bn

Life Non-life Growth (inflation-adjusted)


The EC launched its proposal for a Framework

Directive on Solvency II, the new solvency

system for (re)insurers, on 10 July 2007. The

text is currently being discussed in the Council

and the Parliament as part of the Level 1

negotiations in the EU decision-making

process.

The CEA welcomed the publication of the

Framework Directive. Indeed, the new

Solvency II articles are in general well written,

comprehensive and aligned with an economic

approach to solvency assessment, which

the industry strongly supports. The industry

appreciates the high quality of the work

done to date and the constructive dialogue

it has had with the EC and the Committee

of European Insurance and Occupational

Pensions Supervisors (Ceiops).

The Framework Directive incorporates a

range of features, which the industry has

long strongly advocated. These include:

• use of a risk-based economic approach,

which ensures that the true underlying

exposures of risks and risk mitigation

schemes can be correctly reflected,

thereby eliminating regulatory arbitrage

opportunities that can distort and weaken

the protection available to policyholders;

• a market-consistent approach for valuing

assets and provisions;

• recognition of diversification benefits;

• allowance for the risk absorption available

on certain liabilities, eg profit-sharing

business and deferred tax provisions;

• transparency: unlike other solvency

regimes, Solvency II does not confuse

Solvency II A risk-based economic framework for insurance supervision

The CEA aims to ensure that Solvency II can meet its stated objectives

of enhancing policyholder protection, increasing the competitiveness of EU

(re)insurers and ensuring the efficient allocation of capital.

Sub-prime crisis

The liquidity crisis that originated in

the US sub-prime mortgage sector has

drawn a lot of attention to the Solvency

II proposal. European policymakers and

the press rushed to find out how the

ensuing liquidity and credit crisis could

affect insurance undertakings and where

these risks are tackled by the Solvency II

standard approach or internal models.

The current liquidity crunch is having a

severe impact on the banking sector, but

seems to have left insurance relatively

unscathed. This is because insurance

companies have relatively long-dated

and stable liability cash flows and invest

more heavily in assets with large, well

established, deep and liquid markets,

such as listed equities, government

bonds, etc. Insurance companies tend to

be a source of liquidity as they need to

invest the premiums they receive from

policyholders.

In contrast, banks typically have short-

dated and easily withdrawn liabilities

(deposits) backed by a significant

proportion of relatively illiquid assets

(mortgages). They are therefore much

more vulnerable to liquidity risk.

10


prudence and capital requirements by

incorporating implicit margins in the

technical provisions’ liabilities;

• allowing companies to develop more

sophisticated models to determine their

capital requirements (so-called internal

and partial models), subject to approval

by supervisors;

• significantly increasing the level of

harmonisation across the EU, which will

reduce overlaps in supervision, increase

competition and product innovation;

and,

• moving towards a more appropriate

way of supervising groups and an

integrated EU market that recognises

the economic reality of groups. The

CEA strongly supports the concept of

a group supervisor who has primary

responsibility for key aspects of group

supervision, in close cooperation with all

the other supervisors involved. This will

allow a more streamlined and effective

supervision of groups, which is both

welcome and appropriate.

Outstanding issues

Nevertheless, the insurance industry believes

certain areas need further work. One of

these is the calculation of the proposal’s two

capital requirements, the minimum capital

requirement (MCR) and the solvency capital

requirement (SCR). Policymakers have not

yet made up their minds whether the SCR

(a target level sufficient to cover all 1-in-200

year events) and the MCR (which will trigger

immediate supervisory intervention) should

be calculated consistently.

The MCR should be expressed as a percentage

of the SCR in order to ensure that the two

targets are based on the same risk-oriented

principles and move in the same direction

in adverse circumstances. A ”compact” (or

“percentage of the SCR”) approach for the

MCR is the only way to allow the consistent

application of the ladder of supervisory

intervention measures. This was clearly

demonstrated by the second and third

quantitative impact studies, QIS2 and QIS3.

Group supervision

The CEA rapidly realised the need to set

up a network of industry experts whose

main task would be to clarify the industry’s

interpretation of the Commission’s proposal

on group supervision. This work culminated

in the release of two CEA publications: “FAQs

on Group Supervision & Group Support

Regime” and “How the Group Support

Regime works in practice (Case Studies)”.

Solvency II and

Occupational Pension Funds

While stressing the need to keep to

the Solvency II timetable for insurance

companies, the CEA fully supports plans

to further examine how to apply solvency

requirements to occupational pension funds.

Life insurers and occupational pension funds

are both pension providers and are as such

in competition across the EU.

Life insurance policyholders will benefit

from the high levels of protection to be

delivered by Solvency II and comparable

protection should also be provided to

customers of pension funds where these

present the same risk. Ultimately, it is in

the interest of the market to see consistent

supervisory systems for all providers of

pension solutions to help avoid regulatory

arbitrage and achieve equivalent levels of

consumer protection.

11


The CEA believes that Solvency II should

aim to improve the current supervision of

groups without it meaning the end of solo

supervision. Much of the supervision will

remain at solo level, including the evaluation

of insurance liabilities and the fieldwork

performed by solo supervisors to ensure a

sound internal control and risk management

environment.

Group support is in itself a “tool” to allow

the same confidence level for the capital

requirement of a group as for stand-alone

entities (99.5% confidence level). It should

be a practical and transparent instrument to

allocate capital in the most efficient way and

allow groups to benefit from the recognition

of diversifications effects.

This has been highlighted by CEA

representatives in a series of meetings

with regulators and supervisors of states

not in favour of the group support regime

proposal.

Work with Ceiops

The Committee of European Insurance

and Occupational Pensions Supervisors

(Ceiops) has completed several sets of

Advice called for by the EC in respect of

the Framework Directive.

Ceiops’s further advice to the EC on

groups and the implementation of the

proportionality principle was due in May

2008 after a two-month consultation. The

CEA responded in April 2008 to the two

consultation papers, CP24 and CP25.

Ceiops’s third quantitative impact study

(QIS) provided further insight into the

calibration of the standard approach

used for calculating the solvency

capital requirement (SCR) and further

information on a wide range of elements

of the Solvency II proposal. However, it

fell short of adequately testing the group

supervision proposal.

Stakeholders’ eyes are now on QIS4’s

ability to provide an insight into the

standard approach for groups and a

series of proposed Pillar I simplifications.

Additional work is required to clarify

a number of technical details and to

ensure that the calibration of the model is

appropriate for all insurers.

The CEA has held workshops on QIS4

to provide an insight into the technical

specifications and enhance industry

participation. Valuation assumptions will

continue to be a priority for Ceiops and

the industry.

Overview of EU insurance market

12

The CEA’s Solvency II publications are

available to download free of charge on its

website, www.cea.eu

Split of the number of undertakings by company size (estimate)

Total: 5 000 companies

6%15%

79%

Large companies

Medium-sized companies

Small companies

Split of the market share by company size (estimate)

85%13% 2%

Large companies

Medium-sized companies

Small companies


There was an increase in extreme weather

events in 2007. This is recognised as being

one of the most noticeable changes to

result from global warming, according to

a 2006 study by the Centre for Health and

the Global Environment at Harvard Medical

School in the US. And as EU Environment

Commissioner Stavros Dimas recently said:

“2008 has the potential to become a defining

year for climate policy, in the EU as well as at

international level”.

European officials have been very active on

the international scene negotiating the terms

of the international climate agreement to be

signed in Copenhagen in 2009. A first step

was achieved in December 2007 with the

adoption of the so-called Bali action plan. It

identifies, among other things, the need for

“enhanced action, including vulnerability

assessments, the prioritisation of actions,

capacity-building, risk management and

risk reduction strategies, disaster reduction

strategies and economic diversification to

build resilience”. Europe is also leading the

debate by example. This is crucial not only for

its credibility but also for its own future.

Mitigation ...

The EC’s renewable energy and climate change

package, presented in early 2008, should be

adopted by the end of the year. Its proposals

aim to reduce European greenhouse gases

and increase the share of renewable energies.

As part of this package, the revision of the

Climate change Promoting mitigation, adaptation and innovation

The need for early, collective and coordinated action on climate

change has not only been stressed by several politicians, insurers and other

stakeholders but also by Mother Nature herself.

Climate change in figures

• The most costly catastrophic event for

the insurance industry in 2007 was

January’s Kyrill storm, which caused

up to €10bn of damage (of which

€4bn insured) across many European

countries, according to Swiss Re.

• In the UK, 2007’s floods will cost

insurers £3bn (€3.8bn), according to

the Association of British Insurers.

• Other major events in 2007 included the

heatwave in Hungary, Romania, Greece

and Austria which killed 550 people, and

the forest fires in Greece which left 67

dead, 1 600km² land burnt and caused

an estimated €1.2bn of damage.

• Since the 1970s, economic losses as a

result of weather-related catastrophes

— adjusted for changes in wealth,

inflation and population growth/

movement — have increased on

average by 2% each year.

• The Stern Review published in October

2006 in the UK concluded that if this

trend continues or intensifies with

rising global temperatures, losses from

extreme weather could reach 0.5–1%

of world GDP by the middle of the

century and the overall costs of climate

change will be equivalent to losing at

least 5% of global GDP each year.

13


European Emission Trading System (ETS),

an instrument which drives investments

towards clean technology, aims to strike a

balance between ambitious climate targets

and economic concerns.

... and adaptation

The EC adopted a Green Paper in 2007

that explicitly raises the issue of the role of

insurance markets and launched the public

debate at a conference in July, at which

the CEA participated. A White Paper is

scheduled for November 2008 to present

the EC’s policy recommendations.

The EC has also started to reflect on Europe’s

capacity to respond to disasters and on the

need for a more comprehensive approach to

disaster prevention. The increasing number

of requests recorded by the European

Solidarity Fund has relaunched the debate

on the negative effects of unconditional

compensation mechanisms and the need to

incentivise Member States to take action.

The EC also scrutinises its other policy

initiatives, such as its revision of the Common

Agricultural Policy, its Animal Health Strategy

and its Communication on Water Scarcity

and Drought, for compliance with climate

change objectives.

The insurance contribution

The insurance industry has been

compensating for an increasing proportion

of economic losses from weather-related

disasters, up from 17% in 1980 to 28% in

2006 in Europe, according to Munich Re.

However, the insurability of these risks is

threatened by the expected increase in the

scale and frequency of natural catastrophes,

combined with an increase in the number

of people, property and economic activities

at risk. The insurance sector’s help in

enhancing the insurability of climatic risks

and facilitating mitigation is detailed in the

CEA’s 2007 report “Reducing the Social and

Economic Impact of Climate Change and

Natural Catastrophes — Insurance Solutions

and Public-Private Partnerships”.

The (re)insurance industry will maintain its key

role in investigating and tackling the effects of

0

50

100

150

200

250

0

5

10

15

20

25

30

35

40

45

50

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Num

ber

of e

vent

s

€bn

Economic losses (2006 values)

Insured losses (2006 values)

Number of events

Source: NatCatSERVICE, Geo Risks Research, Munich Re (July 2007)

European weather-related disasters and economic and insured losses caused

14


climate change, incentivising prevention and

risk management and developing appropriate

insurance solutions. Its strong expertise in risk

assessment and risk modelling contributes

to a better assessment of climate change’s

impacts and sound decision-making. The

industry has also been actively contributing

to the work of the Intergovernmental Panel

on Climate Change (IPCC).

In some EU Member States, the (re)insurance

industry has already developed flood-risk

mapping and zoning tools, sometimes

together with public authorities, and the CEA

has been cooperating on similar initiatives

at European level, contributing for example

to the drafting of the EXCIMAP (European

exchange circle on flood mapping) handbook

describing good practices for flood mapping

in Europe. The (re)insurance industry also

has extensive experience of raising risk

awareness and incentivising individuals and

businesses to behave appropriately through

communication campaigns and pricing

and underwriting policies. New insurance

products supporting mitigating actions have

already been launched — from specific

insurances for hybrid vehicles to insurance

for new energy plants or insurance coverage

for the risks related to clean development

mechanism (CDM) projects.

The (re)insurance industry has also developed

alternative risk transfer (ART) mechanisms, such

as weather derivatives or catastrophe bonds,

to transfer risk to institutional investors and

increase the financial capacity of the market.

Last but not least, insurers are reducing energy

consumption and adapting their purchasing

policies to make their own activities more

climate-proof. Nevertheless, due to the scale of

the challenge, public-private partnerships will

be required for the assessment, management

and transfer of risks.

Case studies: Insurance initiatives

In September 2007, the

Association of British

Insurers launched

ClimateWise, a global initiative open

to signatories worldwide to encourage

customers to change their climate-damaging

habits and to influence governments and

major organisations in matters of policy. The

39 signatories from the insurance industry

are committed to taking action on climate

change and to reporting publicly on their

own performance and their contribution to

increased risk assessment and awareness.

In 2007, Swiss Re launched its Climate

Adaptation Development Programme

(CADP), designed to develop a financial risk

transfer market for the effects of adverse

weather in emerging countries. In its first

phase, it aims to provide financial protection

against drought conditions for up to

400 000 people in Africa.

Munich Re initiated the Munich Climate

Insurance Initiative (MCII) in response to the

growing realisation that insurance solutions

can play a role in adaptation to climate

change. It provides a forum for insurers,

climate change and adaptation experts,

non-governmental organisations and

policy researchers, with the aim of finding

insurance-related solutions. It contributes

to the identification and promotion of loss

reduction measures and to the development

and running of pilot projects, with a special

focus on developing countries.

15


Competing products Retail investment products and consumer protection

Only equivalent products should be regulated equally, so the

issue of a level playing field can only be determined after the examination

of all elements of regulation and products.

Ongoing innovation in the design of retail

investment products has led to greater

product diversity and increased choice for

investors. According to the EC’s Internal

Market and Services Commissioner, Charlie

McCreevy, “a wide range of investment

products are now available to help retail

investors take responsibility for their long-

term financial futures”. However, depending

on the legal form the product takes, the EU

legislative framework imposes different levels

of product and fee disclosure requirements,

and different selling rules.

Call for evidence

The EC made a call for evidence in October

2007 on the need for a coherent approach

to product transparency and distribution

requirements for “substitute” retail

investment products. The term “substitute”

products refers, according to the EC, to the

trend, from the consumer’s point of view, for

retail investment products offered by banks,

insurers and fund managers to become

less differentiated. The EC aims to examine

whether the fragmented regulatory landscape

creates unacceptably large variations in

disclosure and in conduct-of-business rules,

resulting in significant risk to investors, and

whether there is a need for further action in

this area.

In general, the CEA believes that there should

be a level playing field for equivalent financial

products, but that a level playing field can only

be determined after examining all elements

of regulation and products. A variety of

product-specific EU regulations already exists

for life insurance (eg Life Assurance Directive,

Insurance Mediation Directive). Given the

different national regulatory frameworks,

a horizontal approach would give rise

to enormous difficulties and the specific

Apples and pears

Unit-linked life insurance products differ

from UCITS (undertakings for collective

investment in transferable securities)

funds, so trying to compare them is like

comparing apples and pears. The EC set

this out in a White Paper on enhancing the

single market framework for investment

funds. Life insurance includes, as its name

clearly suggests, an element of “life cover”

that provides benefits to a designated

beneficiary if an uncertain event related

to the life of the insured occurs. Mere

investment products do not.

Life insurance companies must hold

sufficient solvency margins based on

prudent mathematical provisions and hold

own funds to ensure that any benefits will

be paid. Life insurance products, according

to a large EC survey, offer security and

certainty to the customer. Therefore

unit-linked life insurance products serve

different consumer needs to other retail

financial products.

16


characteristics of individual life insurance

products would not be taken sufficiently into

account.

The level of information provided to consumers

should match their needs. In terms of pre-

contractual information, the Life Assurance

Directive requires insurance companies to

inform the policyholder about benefits,

contract terms, means of termination of the

contract, premiums, taxation and applicable

law and to give an indication of surrender and

paid-up values and the extent to which they

are guaranteed. For unit-linked life insurance

policies, a definition of the units to which the

benefits are linked and an indication of the

underlying assets are required.

An overload of information may prevent

consumers from making an appropriate

assessment of a product. The CEA believes

that providing high-quality rather than

excessive information is a basic principle for

consumer protection, so it strongly supports

the simplification and rationalisation of

existing disclosure requirements, rather than

adding more.

More complexity, more information

Existing conduct-of-business rules result

from differences in the characteristics of

products. The more complex the product,

the higher the level of information required.

The Insurance Mediation Directive (IMD)

requires intermediaries to specify customers’

needs and demands and to provide them

with clear explanations. It also stipulates that

intermediaries should get formal education

and demonstrate their ability to provide

advisory services on life insurance products.

Since in some Member States the insurance

industry has taken additional self-regulatory

measures, in the CEA’s opinion there is no

evidence that existing codes of conduct are

detrimental to consumers.

The IMD obliges intermediaries to inform the

customer if they are doing business exclusively

with one insurer. In insurance mediation

markets the relationship with the customer is

often long-term. This presumes a high degree

of confidence from each party involved and

reduces considerably any conflict of interest.

The CEA supports the EC objectives of

ensuring a higher level of consumer protection.

However, only a tailormade, product-specific

approach is appropriate. The CEA believes that

there is actually no evidence that the existing

insurance-specific regulation framework at EU

and national level is inadequate to protect the

consumer. As the IMD has only recently been

transposed in all Member States, a little more

time is necessary to gain enough experience

from its implementation and assess its impact.

Effective consumer protection should take

into account the different levels of complexity

of financial products. The CEA believes that

any alignment of the regulatory framework

made on the assumption that investment

products are substitutes could interfere

with the capacity of the market to develop

innovative and consumer-oriented solutions.

The EC is expected to publish its conclusions

on the need for further action in this area in

autumn 2008.

17


The debate about the regulatory framework

for reinsurance and collateral requirements

for credit-for-reinsurance in the US has been

going on for 20 years in Washington and

seven years at the National Association

of Insurance Commissioners (NAIC) (see

timetable on p19). The issue is frequently on

the agenda in the EC’s dialogue with the US,

particularly now the EU is considering how

to treat non-EU regimes under its proposed

Solvency II regulatory regime. During NAIC

meetings in 2008, the EC, together with the

UK and German regulators, has corrected

misinformation that US reinsurers would

face barriers to trade in Europe under the

current and proposed (Solvency II) regimes.

The NAIC agreed to start reforms of the US

credit-for-reinsurance regime in December

2006. Its reinsurance task force revised an

original proposal for a Reinsurance Evaluation

Office in September 2007. The revised proposal

would establish a Reinsurance Supervision

Review Department, which would assess the

regulation of non-US jurisdictions to determine

whether they are entitled to enter into mutual

recognition arrangements. A company from an

approved jurisdiction would then be certified

to access the US market through a “port of

entry” state. The NAIC unanimously adopted

this framework proposal in December 2007,

albeit with numerous issues still to be resolved

as the task force draws up a draft model law.

Federal and state

As well as campaigning for change to the

existing collateral regime, the CEA and the

European insurance industry have frequently

expressed support for federal as well as state

regulation of (re)insurance in the US. Despite

the efforts of the NAIC to foster greater

uniformity through the development of

model laws and other coordination efforts,

(re)insurers still operate under different

laws, licensing requirements and regulatory

examinations in each state.

Two bills in this area were introduced into

the US Congress in 2007, the National

Insurance Act, better known as the Optional

Federal Charter (OFC), and the Non-admitted

and Reinsurance Reform Act (NRRA). The

OFC would give (re)insurers the option of

obtaining a federal licence and restricts

the ability of states to regulate reinsurance

ceded to federally-licensed reinsurers. It also

permits federally-licensed insurers to take

Reinsurance Regulatory review in the US

Reinsurance is a global business and US regulatory

reform that will put foreign reinsurers on a equal footing with US reinsurers

is much needed and long overdue.

Costly collateral

Foreign reinsurers operating in the US are

required to maintain collateral in US trust

funds that is equivalent to 100% of their

US liabilities, regardless of their financial

strength, credit rating or reinsurance

cover. This onerous requirement creates

significant extra cost for foreign reinsurers,

whose US-based competitors are not

required to post such collateral.

18


credit for reinsurance ceded to federally-

licensed reinsurers, but does not provide any

relief to cross-border reinsurers operating

with a US licence. In April 2008 the US

Treasury recommended the establishment

of the OFC.

There is little optimism about prospects for

early progress on the OFC, and the NRRA,

in its current form, delivers little for US or

European reinsurers. None of the proposals

under discussion at the NAIC, in key states

and in Washington delivers an ideal and

complete solution to the current issues faced

by European reinsurers.

The CEA keeps in close contact with US

industry associations — the Reinsurance

Association of America, the American

Insurance Association, the American Council

of Life Insurers, the NAIC and the National

Conference of Insurance Legislators to

discuss US regulatory reforms. The issue

of these reforms is also on the agenda of

the OECD Insurance Committee and the

International Association of Insurance

Supervisors, where the CEA is an observer.

Timetable for change

November ‘04

NAIC regulators recognise need for system for credit-for-reinsurance standards that treats all reinsurers equally regardless of domicile

March ‘06

NAIC White Paper notes that “many of the largest, oldest and financially strongest reinsurers are located abroad, and the capacity they provide is very important to US ceding companies”

December ‘06

NAIC Reinsurance Task Force adopts Reinsurance Evaluation Office (REO) proposal

2007

Two bills introduced in Congress: National Insurance Act, known as Optional Federal Charter (OFC), and Non-admitted and Reinsurance Reform Act (NRRA)

September ‘07

REO proposal significantly revised, with functions split between Reinsurance Supervision Review Department (RSRD) and “port of entry state” for certification

November ‘07

NAIC releases “Framework Memorandum” outlining proposal and long list of “unresolved issues”

December ‘07Framework adopted with amendments at NAIC Winter Meeting

March ‘08

US Treasury produces report on US regulatory efficiency because of concerns that US lags behind Europe

March ‘08NAIC adopts Reinsurance Regulatory Modernisation Framework

April ‘08 US Treasury recommends OFC for insurers

Positive state actions

On 18 October 2007, New York published a

radically revised draft credit-for-reinsurance

regulation, which would help towards

achieving a level playing field for EU and

New York reinsurers. Florida published a new

credit-for-reinsurance law in January 2007

and proposed regulations were passed by

the Florida Cabinet on 18 December 2007,

mirroring the funding requirements of the

New York proposal by requiring collateral

on a sliding scale calibrated to financial

strength. Reforms in individual states are,

however, of limited value unless a consistent

model emerges as a precedent that could be

adopted at federal level.

19


20

The EC has engaged in a wide-ranging review

of the operations of the European Union as a

single market. This has focused in particular

on retail financial services, where a lack of

cross-border activity has been identified, due

to existing barriers.

In its review, the EC has taken into account

contributions to the consultation launched

by the Green Paper on Retail Financial

Services in May 2007. The CEA submitted its

contributions together with a series of policy

recommendations aimed at removing the

remaining regulatory obstacles to further

retail insurance market integration.

The CEA highlighted the diversity of national

regulations (eg taxation, liability or social security

legislation and legal systems concerning natural

catastrophes) which hinders the development of

cross-border business in the insurance sector.

On retail insurance, the CEA however also

drew attention to the fact that consumers still

predominantly prefer to buy their insurance

policies locally (see box right). “Natural”

barriers, to cross-border activity, such as the

need for “after-sales services” facilitated

by proximity between the consumer and

the insurer, as well as language barriers,

frequently explain this preference. In addition,

expert knowledge of risk exposures (smoking

habits, driver habits, climate, etc) is necessary

in order to design appropriate insurance

products. These practical considerations

might contribute to the fact that insurers

offer products in other countries through a

permanent branch or subsidiary.

Building on these findings and on other studies

launched in 2006, the EC has identified areas

in which to improve the competitiveness and

Single Market Review A clear focus on customer satisfaction

The CEA welcomes the single market review’s focus on the needs of the

consumer. It believes that consumers should experience concrete benefits from an

integrated European insurance market.

Customer satisfaction

A survey carried out by Ipsos for the EC

in May 2007, based on 29 000 interviews

of consumers in the then 25 EU Member

States, found:

• Insurance services were the second

best rated product out of 11 (electricity

& gas supply, water distribution, fixed/

mobile phone, urban/extra-urban and

air transport, postal services, retail

banking).

• A very high level of customer loyalty

to insurers (87%). Consumers tended

to stay with their insurer and had no

intention of changing in the short term.

This is particularly interesting given that

77% of EU consumers believed that it

was easy to change insurer.

• Consumers believed that there was

enough competition in the insurance

field (88%).

• Only a limited percentage (37%)

thought it possible to purchase services

from an insurer outside their country.

• Consumers were not ready to do so,

since a huge majority (83%) preferred

national insurers.


21

efficiency of European retail financial services

markets. At the end of 2007 it adopted a

“Communication on a single market for the

21st century Europe” and other working

documents with concrete proposals for retail

financial services initiatives.

The main aims of this Single Market Review are

to deliver benefits for citizens, consumers and

small and medium-sized enterprises; to take

better advantage of globalisation; to open

frontiers of knowledge and innovation and

to promote a strong social and environmental

dimension. The so-called “review package”

is not an extensive legislative programme,

but one that aims to remove existing barriers

by using different instruments (legislation,

soft law, voluntary codes) and improved

information to consumers.

Focus on motor

Several initiatives relate directly or indirectly

to the insurance sector. On motor insurance

premiums, for example, the EC is seeking a

better understanding of what discourages

insurers from providing motor insurance

on a cross-border basis and/or by setting up

branches. The CEA has published a detailed

statistical report that highlights the complexity

of this market (see p23). The report also

explains in detail the differences in the national

legal and economic context that are the main

factors behind divergent motor insurance

premiums across the EU. On the surface, motor

insurance may look the same to policyholders

across Europe, but premium levels reflect the

national environment. Decisive factors that

determine this variation across Member States

are the frequency of claims, the average claims

costs, the taxes imposed on premiums and

the road safety conditions in the Member

States. Since the price disparities reflect local

specificities, a standardised approach to pricing

remains difficult.

For example, there are differences in the

impact of road accidents. In Germany there

are on average 13.7 hospitalisations for each

road fatality, while in Portugal this figure is

3.7. As a consequence, the bodily injury share

of claims varies from country to country,

ranging from 6% to 35%.

Other initiatives

Other initiatives in retail financial services

include promoting financial literacy, actions

to allow consumers to move freely between

providers, promoting the EU mortgage credit

market and developing alternative redress

mechanisms.

Transparency and the distribution requirements

of “competing” retail investment products

(see p16) will also be examined in-depth.

Regarding financial literacy, the CEA has

produced a brochure on “Financial awareness

initiatives promoted by the European insurance

industry”. The CEA also contributes directly

to the promotion of best practices among its

members and others in the insurance field.

FFSA — promoting financial literacy

Through a dedicated documentation

centre on its website (CDIA, or Centre

de Documentation et d’Information de

l’Assurance), the French insurance

federation, FFSA, provides information

for both individuals and companies on

a host of insurance topics. Its aim is to

increase financial awareness among

consumers to allow them to take

appropriate decisions when investing

their money in financial products.

The CEA’s financial awareness initiatives brochure is available to download free on the CEA website, www.cea.eu


22

New methodology

The EC has also announced a new

methodology for a systematic monitoring of

the functioning of markets by introducing

sector enquiries and launching a “consumer

scoreboard”.

The consumer scoreboard aims to show the

performance of markets in terms of economic

and social outcomes, using indicators such as

prices, complaints and consumer satisfaction,

along with new data sources such as the

comparison of consumer prices.

This scoreboard will probably be integrated

into the Single Market Scoreboard from 2009

onwards. The EC is also strengthening its

focus on consumers’ opinions with the use

of consumer focus groups to complement

the views it receives from consumer

organisations.

The CEA and its members strive to ensure that

customers are satisfied with the insurance

products available and are pleased to support

an increased EC focus on the customer.

The survey commissioned by the EC in May

2007 (see box on p20) clearly showed a high

level of customer satisfaction with insurance

services.

The EC wants to step up its efforts to ensure

the appropriate and timely implementation

of EU legislation and announced that

priority will be given to infringements. It

will also systematically publish information

on the current state of implementation of

EU legislation, including infringements. The

Single Market Review will be followed up in

the Lisbon Strategy.

Social services of general interest

Services of general interest are services that are essential for the daily life of citizens and

enterprises. They range from energy, telecommunications, transport, broadcasting and

postal services, to education, water supply, waste management and health and social

services.

The CEA wrote to the EC in November 2007 to express its concern that (supplementary)

funded systems in the areas of occupational and private pensions, health and accident

insurance and unemployment insurance could be exempt from the competition rules set

out by the EU.

In these market segments of private insurance, competition already delivers choice and

affordability for consumers. Moreover, these activities are subject to a comprehensive

regulatory and prudential framework as stipulated in the EU insurance acquis.

The aim of the acquis is to build the internal market by providing a regulatory regime

applicable to all insurance providers. Exemptions for social services of general interest

would go against the principle of fair competition.


With the enlargement of the EU and the

Schengen area, Europe’s border-free zone, the

mobility of individuals in the EU has grown

steadily. More and more professionals move

abroad when their own national market does

not offer them attractive job opportunities.

One of their first administrative hurdles in the

new country of residence is the registration

of their vehicle and the change of motor

third party liability insurance (MTPL). When

choosing a new MTPL policy, they soon

discover that there are price differences

between EU Member States.

How are premiums calculated?

Insurers base motor premiums on a detailed

analysis of their own statistics from previous

business years and estimated future

developments. Two of the main factors are

the likelihood of a claim being submitted to

the MTPL insurer (claims frequency) and the

estimated average cost per claim (claims costs).

Claims frequency

The likelihood of being involved in an accident

and a claim being submitted to the MTPL

insurer largely depends on:

• Traffic conditions

A policyholder, who drives an hour to work

every day in an urban area is more likely to

have an accident than a policyholder who lives

in the countryside and uses his car only once

a week at the weekend for a short distance.

• Driving habits

The likelihood of having an accident also

largely depends on driving behaviour in each

country. Drink driving, speeding, not stopping

at a red light and not wearing a seatbelt are

still the traffic offences that lead to high rates

of road fatalities.

• Road safety

Since the road fatality rate among young

drivers is almost two to three times higher

than among average drivers, the EC asked

all Member States, which have committed

themselves to reducing the number of road

Case study: Italy — road safety

A high number of accidents occur among

young drivers aged 14 to 25 years.

Newly licensed young drivers are involved

in 40% of all accidents.

“Ania Campus & Patentino online” is:

• organised by the Fondazione per la

Sicurezza Stradale, created by Ania,

the Italian insurance association

• focuses on young drivers on “two

wheelers”

• offers safe-driving tests on two wheels

and an e-learning platform

• has a steadily growing number of

participants

European motor insurance Why motor insurance premiums are a complex matter

The CEA’s work needs to focus on personal

injury claims – not only in the motor insurance market, but across

various business lines.

The statistical report by the CEA, “The European Motor Insurance Market”, published in December 2007, is available to download free on the CEA website, www.cea.eu

23


fatalities by 50% by 2010, to focus their road

safety measures on young drivers.

Young drivers are characterised by their lack

of road experience, their higher inclination

to take risks and their attraction to high-

powered vehicles. They also usually carry

more passengers in their cars than other age

groups. As a consequence, the number of

injured persons is relatively higher.

The insurance industry, together with other

road safety organisations, has therefore

widened the scope of its road safety measures

to target young drivers.

• Fraud

Insurance fraud exists in all Member States.

The percentage of fraudulent claims varies

not only from state to state, but from region

to region.

The Italian Insurance Association (Ania) has

found a significant correlation between claims

frequency and the percentage of fraudulent

claims. The southern region of Campagnia, for

example, shows the highest claims frequency

at 11.64% and also the highest percentage

of fraudulent claims at 8.39%. The same

correlation between claims frequency was

found in the northern region of Liguria. Since

the number of fraudulent claims has a direct

impact on claims frequency and on claims

costs, the insurance industry is determined to

fight insurance fraud.

Claims costs

Claims costs mainly consist of repair costs, the

cost of spare parts, costs for personal injury

and legal costs.

• Repair costs & spare parts

While the price of spare parts has remained

relatively moderate, repair costs have

grown by an average of 3.5% over the last

10 years across the EU and vary significantly

between Member States.

• Bodily injuries & legal costs

The amount of compensation paid for bodily

injuries generally depends on national law

and the national jurisdiction regarding the

different injuries.

In addition, living standards and medical costs

in the relevant Member State have a decisive

influence on the damages awarded.

Case study: UK — insurance fraud

Research by the Association of British Insurers (ABI) shows:

• an annual cost of insurance fraud of £1.6bn (€2.0bn)

• one in ten adults admits to having committed insurance fraud

• a rise in the average premium of £40 (€51bn) due to the cost of

fraud

The British insurance industry and the police launched the Insurance

Fraud Bureau (IFB) in July 2006 to detect fraudulent claims and

fight fraudulent activity effectively.

24


A cost that is often underestimated is legal

costs. Victims who have suffered an injury

in an accident often pursue their claim for

compensation with the help of a lawyer.

Though the majority of personal injury

claims are settled out of court, the legal

costs still represent a significant share of the

compensation paid in some Member States

like the UK.

The CEA and its members have therefore

been working and continue to work on claims

settlement procedures that allow for quick and

fair settlement.

The EC is currently analysing the compensation

paid for personal injuries in cross-border cases

in order to determine whether there is room

for improvement. The CEA is committed to

contributing to the discussions with the aim of

safeguarding the effective and quick settlement

of cross-border claims.

Differences in motor insurance premiums

can largely be explained by a variety of

different local/regional factors, which cannot

be influenced by the insurance industry.

The insurance industry has, however, taken

numerous measures to reduce claims

frequency and claims costs that have a direct

impact on insurance premiums.

Case study: Germany —

claims costs for private cars by region

Source: GDV, the German insurance association

An index of motor third part liability (MTPL)

claims costs is calculated per region based

on local data. The darker the colour, the

higher the claims index and thus the higher

the premium. The factors explaining the

regional differences include:

• traffic density (far higher in urban areas

such as Berlin and Munich)

• economic development (eg the claims

index is lower in eastern Germany)

• terrain (eg the claims index is higher in

the mountainous south)

Case study: Austria — repair costs

In 2006 the Austrian motor insurance

industry noted:

• an increase of 3.22% in repair costs

— more than 1.22% above the

inflation rate

• an increase in hourly labour costs of

5.17% to €101

Measures taken to reduce repair costs:

• the use of alternative, cost-saving

repair methods

• electronic communication with repair

shops

25


Since 2005, all European listed companies

have been required to prepare their

consolidated financial statements under

International Financial Reporting Standards

(IFRS). Those standards are developed by the

International Accounting Standards Board

(IASB).

However, there is currently no proper IFRS for

valuing insurance contracts in the financial

statements of insurance companies. Indeed,

the current standard introduced in 2004,

IFRS 4, is only an interim standard to enable

European insurers to be IFRS-compliant

for their consolidated accounts. Though

considered a necessary first step, IFRS 4 has

not been deemed an acceptable long-term

solution.

Three building blocks

In May 2007, the IASB issued a first proposal

of a final standard, the Insurance Contract

Discussion Paper. This standard, IFRS 4

Phase II, aims to introduce significant changes

in the fundamental valuation of liabilities

in insurance contracts. The single model

proposed for both life and non-life products

is based on three building blocks: the

prospective approach of future cash in- and

outflows generated by a contract (the “best

estimate”); the discounting of cash flows for

the time value of money; and a margin for

risk and uncertainties.

Each building block raises concerns or

questions. For the first, the IASB has

tentatively preferred a legalistic approach to

separate the cash flows to be included or

excluded. For example, future premiums such

as renewal premiums or recurring premiums

are only taken into account if they meet the

concept of guaranteed insurability. Broadly,

this means taking into account future

premiums only if the policyholder has an

economic interest in paying them, regardless

of whether it is beneficial or not for the

insurers. Another example is the discretionary

bonuses that insurance companies often pay

to policyholders. At this stage, those bonuses

would only be recognised as insurance

provisions if they are legally enforceable.

The second block aims to take into account

the time value of money for both life and non-life reserves. The discount rate should be an observable market-risk-free rate and should not be linked to the return on assets held by the insurer.

Finally, the third block is the risk and service margins. The IASB proposes to calculate the risk margin as being the margin that a third party would require to assume the insurance liability from the initial insurer (current exit value). The discussion paper considers alternative approaches, such as calibrating the reserve on the premium charged, but tentatively concludes that the current exit value would provide more useful information for users of financial statements. As for the service margin, though the concept is unclear

IFRS 4 Phase II New accounting standards for Europe

Last year there was tremendous momentum in the European insurance

industry to comment on what IFRS should be for insurance and on its links with

Solvency II. We need to maintain this momentum.

26


it is understood to be the margin that a third party would require to provide services other than the insurance risk cover (ie investment management for certain life contracts).

The choice of the current exit value raises several questions:

• Is the objective of transfer value relevant

in a world where few transfers occur?

• Does the current exit value prevent insurers

from using their own assumptions when

determining cash flows (the first building

block)?

• Should the insurance liabilities include any

benefit from portfolio diversification?

These questions are still to be considered by the IASB and key stakeholders. However, for insurers it is clear that for certain non-financial assumptions (ie expenses) where there is no observable market it is less arbitrary and more relevant to use their own assumptions when calculating insurance liabilities. Insurers also believe that diversification across portfolios should be allowed for when measuring insurance liabilities. The calibration of the risk margin is extremely important for insurers as it has a direct impact on the pace at which profits are reported (eg the question of profit at inception).

On many key topics (unbundling, future premiums, participating contracts, etc) the insurance industry is unified worldwide. However, on other important topics such as the single measurement model or which discount rate to use, US insurers have views that are not in line with the approach supported by European insurers.

Uncertain future?

In November 2007, the CEA and the CFO Forum issued a joint comment letter in response to the discussion paper, setting

out the initial views of European insurers. The IASB is expected to issue its second (and final) consultation document, an exposure draft, in late 2009 at the earliest, giving the insurance industry another opportunity to voice its views and in the meantime actively to contribute to the design of the draft, in particular the notion of transfer and settlement value. However, the IASB is currently reviewing its timetable in the light of its work with the US standards setter, the Financial Accounting Standards Board (FASB). It is unclear at this stage whether the insurance project will advance as announced.

Finally, IFRS 4 Phase II is currently being developed on a similar timetable to the new regulatory regime for European insurers, Solvency II. Solvency II and IFRS 4 Phase II are both based on an economic valuation of insurance liabilities, so it makes sense for the two to converge as much as possible and any potential divergence needs to be carefully explained. The CEA’s positions in its IFRS 4

Phase II comment letter were developed in

light of its positions on Solvency II.

Other IASB projects

Many of the issues raised by IFRS 4 Phase II

could have an impact on other industries.

The possibility of taking customers’ future

behaviour (ie renewals) into account when

valuing contracts is one example.

There are also currently other significant

areas of work at the IASB that interact

with the insurance project. In particular,

the IASB is developing discussion papers

on revenue recognition, the presentation

of financial statements and fair-value

measurement.

27


In mid-2005 the EC’s Directorate General

for Competition launched an inquiry into

business insurance. It published its interim

report in January 2007. The CEA commented

extensively on the findings and, in April 2007,

submitted ten policy recommendations. On

25 September 2007, the EC published its

final report. Its main findings cover long-term

contracts, profitability, premium alignment

practice in the subscription market and

horizontal cooperation, ie the insurance Block

Exemption Regulation (BER).

The CEA noted that the EC overstated the

profitability of the business insurance sector

in its preliminary report. The CEA therefore

recommended the use of an indicator such

as return on equity or cost of capital to

allow comparison between business lines

and countries that takes into account both

investment income and the level of capital

required, as well as the use of a longer

timeframe to adequately recognise the cyclical

pattern of insurance activity.

While it acknowledged the validity of certain

CEA criticisms, the EC maintained in its

final report that profitability was quite high

in EU business insurance, and that it varied

significantly depending on business lines,

Member States and whether customers were

small companies or large corporations.

The EC observed a widespread practice in

co-(re)insurance markets resulting de facto

in an alignment of premiums and other

conditions of coverage. According to the

EC, certain of those individual practices,

when resulting from agreements between

undertakings, may not satisfy all the criteria

for exemption from EU competition law.

The EC made clear that it has no objections

to the concept of co-insurance itself, but that

it was concerned about the automatic (or so

perceived) practice of premium alignment

by the following market on the basis of the

tariff quoted by the lead insurer. The EC

recommended that the industry “engage in

EC inquiry into competition issues Maintaining a competitive business insurance market

The EC’s 2007 report on business insurance put the subscription market and the insurance

Block Exemption Regulation (BER) in the spotlight and marked the beginning of intense

efforts to better explain their benefits to Europe’s society and economy.

Bipar principles

The CEA formally endorsed the high level

principles for placement of a risk with

multiple insurers that were published by

the European Federation of Insurance

Intermediaries (Bipar) in April 2008.

These principles aim to provide security

for clients by setting a framework to

facilitate the placement of business risks

by brokers with multiple insurers. They

make firm proposals on how the client

should be given the opportunity to make

an informed choice on how best to

complete the coverage of the risk, based

on the broker’s advice.

The EC will monitor the practical

implementation of these principles and,

if competition concerns remain, will make

use of its enforcement powers.

28


a critical reappraisal of the said practices”. In

mid-February 2008, the CEA highlighted to

the EC the highly competitive environment for

subscription placement and stressed that the

premium alignment strategy, while clearly not

obligatory, may present for all parties, including

the customer, the most advantageous way to

place risks in certain circumstances.

In parallel, the CEA joined the initiative of the

European Federation of Insurance Intermediaries

(Bipar) to develop a series of high level principles

for placement of a risk with multiple insurers (see

box left).

BER benefits

In its final report, the EC recognised the need

for the forms of cooperation (joint calculation,

standard policy conditions, pools and security

devices) covered by the BER, but called into

question the need to renew it beyond its 2010

deadline. The EC considers that operators have

enough experience to assess whether their

behaviour conforms with antitrust legislation

without the benefit of the BER.

The EC’s final decision on the future of the BER

will be based in particular on the outcome of

a consultation document published in April

2008. The CEA is taking part in the consultation

process, which ends in July 2008.

The CEA believes that the full benefits of the

BER for market integration and ultimately

consumers should be given sufficient

weight.

On several occasions the CEA has

demonstrated that the BER has proven

beneficial to competition. It leads to the

opening of markets to new players and small

and medium-sized insurance undertakings,

thus enhancing the variety of products

available to consumers.

The BER also facilitates insurability of risks

and provides the legal certainty necessary for

market efficiency and stability. Were the BER

to be abolished, some insurers might abandon

positive business cooperation for fear that it

is afterwards challenged by the competition

authorities.

What is the BER?

The Block Exemption Regulation for the insurance sector covers agreements between insurance companies that are exempt from EU competition law.

The BER allows, for example, the collection and dissemination of market claims data. This enables both large and small insurers to set more competitive premium levels because their calculations are based on a wider and more representative sample of data than they would be able to collect themselves and it also makes it easier fo insurers to enter new markets, thus increasing competition.

The BER makes it possible for insurers to jointly establish and distribute standard policy conditions. In the case of industrial property insurance, for example, standard policy conditions are normally drafted to provide average protection. Contracting parties then take these conditions as a starting point and the outcome is usually a contract accurately tailored to the client’s needs. The BER also enables the co-insurance of large risks, for which adequate capacity might otherwise be unavailable.

The current insurance BER is due to expire on 31 March 2010.

29


As part of its drive to update and simplify

taxation rules for insurance and financial

services, the EC presented a proposed

amendment to the existing EU Value Added

Tax (VAT) legislation in November 2007,

seeking to introduce a new modernised

system for insurance and financial services at

EU level.

The present: what is wrong?

Problem 1: Uncertainty over exemption

The VAT Directive, which exempts financial

services and insurance from VAT, dates

from 1977 and has not been revised since.

In contrast, the insurance and financial

services market has changed dramatically,

with increased global competition driving

economies of scale and improved efficiency.

In particular, there is far more outsourcing in

insurance and financial markets, so insurers

frequently deal with companies which would

not normally be considered to be financial or

insurance institutions.

The exemption for insurers in article 135/1(a)

of the VAT Directive refers exclusively to

insurance and to “related services performed

by insurance brokers and insurance agents”.

This make the identity of the supplier

fundamental to the exemption of the

outsourced service.

This exemption, which is not applied

uniformly by Member States, and the

changes to insurance business structures has

meant that the European Court of Justice (ECJ)

has frequently been required to interpret the

VAT legislation (including landmark decisions

such as C-08/01 Taksatorrigen and C-472/03

Andersen). Since the outcome of the growing

list of ECJ decisions is unpredictable, this has

created uncertainty.

Problem 2: Lack of neutrality —

recovering VAT

Under the VAT system, insurance and financial

companies do not tax the services they supply.

As a result, they are generally prevented from

recovering the VAT they pay on the goods

and services they purchase to carry out their

activities.

30.

Timetable

November 2007 — draft Directive on VAT

on insurance and financial services issued

by the EC

March 2008 — position paper issued by

the CEA

November 2007 onwards — European

Parliament and European Council consider

the proposals. Parliament to issue a non-

binding opinion. Unanimous vote of the

Council required for adoption of the

Directive

31 December 2009 — date by which

it is envisaged the Directive should be

transposed by EU Member States

VAT — Insurance and Financial Services Review Towards a modernised taxation system

The updated taxation rules in the review are a

first step towards a European level playing field and an opportunity

to reduce hidden VAT.

30


This input VAT therefore becomes a

cost to companies and decreases their

competitiveness, in open contradiction of

one of the basic features of VAT, namely

neutrality for business operators in the

supply chain.

The future: what will change with the

VAT — Insurance and Financial Services

Review?

The VAT — Insurance and Financial Services

Review consists of:

• an amendment to the existing VAT Directive

to increase legal certainty both for the

business sector and tax authorities and to

tackle the issue of non-recoverable VAT

• a new Regulation which expands the

definitions of exempt services and will

apply directly in all Member States

The review also provides insurance and

financial operators with two instruments

for reducing the negative impact of non-

deductible VAT: the option to tax their

services if they wish; and an industry-specific

exemption from VAT on groups’ cost-sharing

arrangements, including those that are cross-

border, to enable institutions to pool their

operations and share costs between group

members without creating additional non-

recoverable VAT.

The CEA welcomes the VAT — Insurance and

Financial Services Review and, with the support

of its members, fully engaged in the EC’s

consultation process during the months that

preceded the presentation of the proposals

in the review. Several meetings on the key

issues were held with all interested parties at

the EC.

The CEA is broadly satisfied with the

proposals as they currently stand. They

largely take on board the concerns the CEA

expressed over the definition of insurance

and insurance-related services.

Nevertheless, interpretation of the review’s

proposals is not straightforward. Europe’s

insurers still have concerns over the

interpretation of the VAT Directive and VAT

Regulation. The CEA has therefore already

made public in a position paper its belief that

some of the proposed wording still needs to

be debated and clarified, so that the legal

certainty and systematic approach promised

by the review can be delivered.

Insurance definition

This is the first time that an EC draft

Directive has attempted to define

insurance activities. The definition (Article

135a*) reads:

“’insurance and reinsurance’ means a

commitment whereby a person is obliged,

in return for a payment, to provide another

person, in the event of materialisation of

a risk, with an indemnity or a benefit as

determined by the commitment”.

*Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax

31


The EU’s Lisbon Treaty of December 2007

focuses on ensuring that the EU’s internal

market functions well. As a result, the new

policy vision for the single market is a greater

focus on the needs of consumers and small

businesses.

This means that competitive retail insurance

markets, including liability insurance, will

have to offer maximum choice and the best

quality products at the lowest price. Where

the introduction of mandatory liability

insurance schemes is being considered, the

CEA believes that a pragmatic and economic

approach must be adopted. The CEA would

like to ensure that any compulsory schemes

that are introduced are well balanced;

reconciling all economic and social interests

so that there are no market failures and no

adverse effects on the good functioning of

the internal market.

The EU’s treaties do not explicitly empower

the EC to regulate liability. In the absence of

such provisions, EC rules related to liability,

when available, are sector-specific, covering

areas such as public health, the environment,

agriculture and transport.

Over recent decades there has been a trend

towards the introduction of mandatory

insurance cover in various areas, such as the

environment, public health and food safety.

This is because such schemes are perceived by

the European institutions to be a consumer

protection measure providing sweeping

protection/compensation against possible

failure from the liable party, while at the

same time reducing the burden on the public

purse.

Compulsory not always efficient

Yet, mandatory liability insurance is not

always an efficient tool to protect consumers.

A poorly designed scheme provides little

comfort to consumers, forcing them into a

national liability system, with time-consuming,

Compulsory liability The new EU policy perspective

Liability insurance is increasingly seen by the political community as a tool for consumer

protection. The insurance industry is always willing to discuss how it can support EU policy

objectives and dialogue is essential to ensure that any mandatory schemes are feasible.

Case study: Construction

In the late 1980s, the EU identified a need

for action to eliminate the distortions

arising from differing regulations and to

harmonise the rules governing liability.

A group of European professional and

trade associations for the construction

industry (Gaipec) was set up to assist the

EC in drawing up a proposal for a Directive

on liabilities and guarantees. Broad

agreement was reached on most topics,

except the liabilities and guarantees that

differed too widely from one Member

State to another. In 2007 the EC took

up this subject again. Learning from

the past, it is not intending to further

harmonise liability rules and insurance

schemes throughout Europe. Instead it is

adopting a pragmatic approach in which

relevant stakeholders will assist the EU in

identifying good practices.

32


expensive and uncertain claims that take

years to settle. The issue is complex, and

macro-economic and social considerations

have to be addressed before any EU-wide

mandatory liability insurance should be

proposed. Stricter liability regimes always

involve social costs and make the supply of

products and services more expensive. The

costs of poorly designed compulsory schemes

are ultimately borne by consumers.

Except in a limited number of areas, such as

third party motor liability insurance or liability

insurance for air carriers, there are significant

differences in this area between EU Member

States. If the functioning of national

insurance markets and compensation

schemes is not to be adversely affected when

there is intervention at EU level, there needs

to be a robust public policy rationale, well

understood and accepted by the general

public and prospective policyholders. That

intervention might be required in instances

where conceivable losses are so great that

it would be unacceptable to rely on the

development on a voluntary basis of a

commercial insurance market (eg nuclear

risks). Costs and benefits must be carefully

weighed against each other for a well

balanced compulsory liability insurance

scheme.

Key requirements

The key prerequisites for setting up

mandatory liability insurance schemes in

Europe are:

• an established and sustainable liability

insurance market: readily transferable

expertise, experience and knowledge,

together with sufficient capital and other

capacity, eg skills;

• a plentiful supply of capacity and

adequate limits;

• competition: choice of products and

insurers;

• cover available to all buyers; and,

• demonstrable compliance with the latest

solvency regulations.

Case study: Environmental

impairment

The EC’s Environmental Liability Directive

(ELD) of 2004 implements at EU level the

“polluter pays” principle. In it, market-led

insurance solutions are seen as key.

The CEA environmental expert working

group issued a report in February 2008

entitled “The Environmental Liability

Directive: Enhancing Sustainable Insurance

Solutions”. It set out the cornerstones of

underwriting, risk assessment and claims

handling needed to allow the development

of innovative insurance products for

environmental damage.

33

The CEA’s environmental liability publication is available to download free of

charge on its website, www.cea.eu


After a three-year suspension, the Insurance

Sectoral Social Dialogue Committee (ISSDC) (see

box) relaunched its activities in September 2007.

The members issued the “Declaration of the

European social partners on the social dialogue

on insurance”, summarising its aims and setting

out a series of themes for discussion.

Seminars in new Member States

The ISSDC agreed on a comprehensive work

programme for 2007-2008. One item is

to facilitate the integration of the new EU

Member States into European social dialogue

in the insurance sector. To achieve this, the

EC is funding two seminars, organised by

the social partners, for representatives of

employers and employees in new Member

States.

The first one, aimed at the Czech Republic

and Slovakia, took place in Prague on 31

March–1 April 2008. It stimulated a positive

and lively exchange of views on the existing

collective bargaining structure at both sectoral

and company level and on ways to improve

the structure for social dialogue. The second

seminar will be held in Budapest.

The objective of these seminars is to familiarise

the social partners in the new and old Member

States with each other’s industrial relations,

and to integrate the new states into the

European social dialogue structures. A two-

day conference in Brussels will draw together

the results of the seminars and a follow-up

project will further develop the exchange of

experiences and facilitate networking.

Demographic challenges

Another topic identified for the ISSDC in 2008

is the challenge of demographic change,

focusing mainly on the problems that the

changing age structure of populations

presents for the insurance sector.

Other areas that may be examined in the near

future are the attractiveness of the insurance

sector; life-long learning and training;

retention of older staff and recruitment of

new staff members; work-related stress;

corporate social responsibility; and work/

family balance.

A history of dialogue

The CEA has been engaged in social

dialogue in the insurance sector for

more than 20 years. It participated in an

informal working party from 1987 and

it joined the Insurance Sectoral Social

Dialogue Committee (ISSDC) after it was

established in 1999.

Employers’ representatives in the ISSDC

are the CEA, Amice (Association of Mutual

Insurer and Insurance cooperatives in

Europe) and Bipar (European Federation

of Insurance Intermediaries) and the

employee representative is UNI-Europa,

the federation of European trade unions.

Social dialogue Improving industrial relations in insurance

The CEA is back on the European social scene, ready to engage

in a fruitful social dialogue with its partners in the insurance sector for the benefits of

European workers and employers alike.

34

The CEA

CEAInsurers of Europe


GENERAL ASSEMBLY

15 June 2007

The CEA’s 2007 General Assembly was

held in Stockholm, hosted by the Swedish

federation, Sveriges Försäkringsförbund.

A conference addressing how the insurance

industry can help to deliver solutions to a

range of new and emerging risks followed

the General Assembly meeting. Sweden’s

Minister for the

Environment,

Andreas

Carlgren, made

the keynote

speech. Other

speakers

included

Professor Dr

Peter Höppe of

Munich Re on

climate change

and Professor

Angus Nicoll of

the European Centre for Disease Prevention

and Control on pandemics.

The day before the

General Assembly,

the CEA held four

individual workshops

on key issues for insurers: Solvency II,

demographic challenges, social security, and

fraud and data protection.

General Assembly attendees also enjoyed a

gala dinner in Stockholm’s City Hall, at which

a traditional Nobel Prize Award Ceremony

dinner was served.

CEA events 2007–2008

Professor Dr Peter Höppe during his speech at the conference on new and emerging risks

Torbjörn Magnusson, chairman of the board of the Swedish Insurance Federation

The CEA’s General Assembly statutory meeting

CEA president Gérard de La Martinière with (right) Sweden’s Minister for the Environment, Andreas Carlgren

36


CONFERENCE Solvency II: A window of opportunity for European consumers and industry

6 March 2008

More than 200 delegates packed the

conference hall of the Permanent

Representation of the Free State of Bavaria to

the EU in Brussels to hear keynote speeches

and panel debates on the key issues of the

Solvency II project. Charlie McCreevy, European

Commissioner for Internal Market and Services,

and Mick McAteer, member of the consultative

panel of the Committee of Insurance and

Occupational Pensions Supervisors, gave the

keynote speeches, which were followed by

two lively panel discussions on issues affecting

small and medium-sized enterprises and on

group supervision. CEA also hosted its annual

cocktail reception at the same venue the night

before the conference.

CEA president Gérard de La Martinière, CEA director general Michaela Koller and John Purvis MEP at the annual cocktail reception

EU Commissioner Charlie McCreevy gives his keynote speech at the Solvency II conference

Peter Skinner MEP contributes to the Solvency II panel debate, watched by Klaas Knot of the Ceiops managing board and Elemér Terták of the European Commission

WORKSHOP

The Environmental Liability

Directive: Enhancing sustainable

insurance solutions

13 February 2008

Following a successful workshop in

January 2007, the CEA held its second

environmental liability workshop in

Brussels in February 2008 to launch

a report entitled “The Environmental

Liability Directive: Enhancing sustainable

insurance solutions”.

The workshop was attended by around

130 key stakeholders, including Member

State transposition authorities, national

insurance associations, European

Commission officials, insurance

providers and brokers. The report

and the workshop aimed to stimulate

discussion of the EC’s Environmental

Liability Directive and to highlight

areas in which insurers might provide

affordable risk transfer solutions in this

new field of sustainable development

and environmental protection.

37


CEA publications 2007–2008

Annual Report 2006–2007 (June 2007)

Solvency II – Main Results of CEA’s Impact Assessment

(June 2007)

Solvency II Briefing Note 1: Diversification

and Specialisation (June 2007)

Solvency II Briefing Note 2: The Insurance Groups and

Solvency II (June 2007 )

Solvency II Briefing Note 3: The Small and Medium-Sized Undertakings and Solvency II

(June 2007 )

Reducing the Social and Economic Impact of Climate

Change and Natural Catastrophes(June 2007 )

Briefing Note: Adapting to Climate Change

(June 2007 )

European Insurance in Figures (2006 data)

(August 2007)

The Role of Insurance in the Provision of Pension

Revenue(September 2007)

38


39

Solvency II Briefing Note 4: Why it Matters to Consumers

(November 2007)

The European Motor Insurance Market(December 2007)

Solvency II: How the Group Support Regime works in

practice (Case Studies)(February 2008)

Solvency II: FAQs on Group Supervision &

Group Support Regime(February 2008)

The Environmental Liability Directive:

Enhancing Sustainable Insurance Solutions

(February 2008)

Tax Treatment of 2nd and 3rd Pillar Pension

Products 2008 (March 2008)

Indirect Taxation on Insurance Contracts in

Europe 2008 (March 2008)

All CEA publications are available to download

free of charge from the CEA website:

www.cea.eu

39


Since the last Annual Report, the CEA has

undergone a major transformation. The

federation is now entirely Brussels-based, close

to the major European decision-makers, and

has rapidly re-established its former strength.

Its strengthened workforce is now in a position

to lobby efficiently and effectively on behalf

of its members — the national associations —

on the many EU projects currently underway

that concern Europe’s (re)insurers.

Changes to the CEA’s governance have put

increased emphasis on active and efficient

representation of its member associations’

interests and has thus created a strong platform

for coordinated and complementary lobbying

activity by the CEA and its members.

The CEA has also undertaken a full review of

its committees; the groups that shape and

drive the CEA’s activities. It has created a

leaner, more streamlined committee structure

that enables committee members and the CEA

secretariat to focus firmly on key activities and

achieving results. A transparent procedure for

nominating committee chairpersons has also

been drawn up, and new chairpersons will

take up their positions in the second half of

2008.

The reshaping of the CEA has had the full

support of its members and throughout the

reorganisation the CEA has remained effective

in representing the European (re)insurance

industry to all the key European institutions.

The term of office of CEA president Gérard de

La Martinière was extended by a year to ensure

continuity throughout the reorganisation. His

extended term comes to an end at the CEA’s

General Assembly in Berlin in June 2008 when

Tommy Persson, currently CEO of Sweden’s

Länsförsäkringar, will take over as president,

bringing the perspective of a medium-sized

Nordic mutual to the leadership of the CEA.

Three associate members have

become full CEA members in the past

year. Following the accession of Bulgaria

and Romania to the EU on 1 January 2007,

the Bulgarian national association

(ABZ) and the National Association of

Insurance and Reinsurance Companies

from Romania (Unsar) have become full

members, as has the Croatian Insurance

Bureau.

2007–2008 — a year of revitalisation at the CEA

CEA president Gérard de La Martinière has overseen the CEA restructuring

Incoming president Tommy Persson of

Länsförsäkringar

40


CEA Presidential Council

Tommy PerssonVice-Chairman, Sveriges FörsäkringsförbundCEO, Länsförsäkringar

Roman HolčekPresident, Slovenská asociácia poist’ovníChairman of the Board, Amslico AIG Life Insurance Company (SK)

Pilar González de FrutosPresident, Unión Española de EntidadesAseguradoras y Reaseguradoras (ES)

Rolf-Peter Hoenen Member of the Board, Gesamtverband der Deutschen VersicherungswirtschaftCEO, HUK Coburg (DE)

Carlo Acutis Member of the Executive Committee, Associazione Nazionale fra le Imprese AssicuratriciVice-President, Vittoria Assicurazioni (IT)

Erich Walser President, Schweizerischer Versicherungsverband Chairman & CEO,Helvetia Group (CH)

George Kotsalos Chairman of the International Affairs Committee, Hellenic Association of Insurance CEO, Interamerican Group (GR)

Christian Defrancq President, Assuralia CEO, KBC Verzekeringen (BE)

Albert LauperPresident of the Administrative Council, Die Mobiliar (CH)

Gérard de La MartinièrePresident, Fédération Française des Sociétés d’Assurances (FR)

President

Vice-Presidents

Treasurer

Members

41


AT — Austria

Versicherungsverband Österreich

(VVO)

President: Herbert Fichta

BE — Belgium

Assuralia

President: Christian Defrancq

BG — Bulgaria

Association of Bulgarian Insurers (ABZ)

President: Orlin Penev

CH — Switzerland

Schweizerischer Versicherungsverband

(ASA/SVV)

President: Erich Walser

CY — Cyprus

Insurance Association of Cyprus

President: Stephie Drakou

CZ — Czech Republic

Česká asociace pojišt’oven (ČAP)

President: Ladislav Bartoníček

DE — Germany

Gesamtverband der Deutschen

Versicherungswirtschaft (GDV)

President: Bernhard Schareck

DK — Denmark

Forsikring & Pension (F&P)

President: Stine Boss

EE — Estonia

Eesti Kindlustusseltside Liit

President: Andres Sooniste

ES — Spain

Unión Española de Entidades Asegura-

doras y Reaseguradoras (Unespa)

President: Pilar González de Frutos

FI — Finland

Finanssialan Keskusliitto

President: Markku Pohjola

FR — France

Fédération Française des Sociétés

d’Assurance (FFSA)

President: Gérard de La Martinière

GR — Greece

Hellenic Association of Insurance

Companies

President: Fokion Bravos

HR — Croatia

Hrvatski ured za osiguranje

President: Marijan Ćurković

CEA member associations and presidents

42


HU — Hungary

Magyar Biztosítók Szövetsége

(MABISZ)

President: István Filvig

IE — Ireland

Irish Insurance Federation (IIF)

President: Michael Leahy

IS — Iceland

Samtök Fjármálafyrirtækja (SFF)

President: Lárus Welding

IT — Italy

Associazione Nazionale fra le Imprese

Assicuratrici (Ania)

President: Fabio Cerchiai

LI — Liechtenstein

Liechtensteinischer Versicherungs-

verband e.V.

President: Heiner Keil

LT — Lithuania

Lietuvos draudiku asociacija

President: Edmontas Volochovicius

LU — Luxembourg

Association des Compagnies

d’Assurances (ACA)

President: Pit Hentgen

LV — Latvia

Latvijas Apdrošinātāju asociācija (LAA)

President: Juris Dumpis

MT — Malta

Malta Insurance Association

President: David G. Curmi

NL — Netherlands

Verbond van Verzekeraars (VVN)

President: Ludo Wijngaarden

NO — Norway

Finansnæringens Hovedorganisasjon

(FNH)

President: Idar Kreutzer

PL — Poland

Polska Izba Ubezpieczeń (PIU)

President: Tomasz Mintoft-Czyż

PT — Portugal

Associação Portuguesa de

Seguradores (APS)

President: Pedro Rogério de

Azevedo Seixas Vale

RO — Romania

Uniunea Naţională a Societăţilor de

Asigurare şi Reasigurare (Unsar)

President: Cristian Constantinescu

SE — Sweden

Sveriges Försäkringsförbund

President: Torbjörn Magnusson

SI — Slovenia

Slovensko Zavarovalno Združenje (SZZ)

President: Mirko Kaluža

43


SK — Slovakia

Slovenská asociácia poist’ovní

President: Roman Holček

TR — Turkey

Türkiye Sigorta ve Reasürans Sirketleri

Birligi

President: Hulusi Taşkiran

UK — United Kingdom

The British Insurers’ European

Committee (BIEC)

Association of British Insurers (ABI)

President: Archie Kane

International Underwriters Association

of London (IUA)

Chairman: Stephen Riley

Lloyd’s of London

Chairman: Lord Peter Levene

Observers

RU — Russia

All Russian Insurance Association (Aria)

President: Alexander Koval

UA — Ukraine

The League of Insurance Organisa-

tions of Ukraine (LIOU)

President: Oleksandr Filonyuk

CFO Forum

President: Denis Duverne

ICISA

International Credit Insurance &

Surety Association (ICISA)

President: John Rumpler

44


CEA Director Generals’ Conference

Louis Norman-AudenhoveSecretary GeneralAT — AustriaVersicherungsverband Österreich (VVO)

René DhondtDirector GeneralBE — BelgiumAssuralia

Orlin PenevChairmanBG — BulgariaAssociation of Bulgarian Insurers (ABZ)

Lucius DürrCEOCH — SwitzerlandSchweizerischer Versicherungs-verband (ASA/SVV)

Stephie DracosCEOCY — CyprusInsurance Association of Cyprus

Tomáš SíkoraCEOCZ — Czech RepublicČeská asociace pojišt’oven (ČAP)

Jörg Freiherr Frank von FürstenwerthCEO DE — GermanyGesamtverband der Deutschen Versicherungswirtschaft (GDV)

Per Bremer RasmussenCEODK — DenmarkForsikring & Pension (F&P)

Kristjan NiinemaaCEOEE — EstoniaEesti Kindlustusseltside Liit

Aránzazu del Valle SchaanSecretary GeneralES — SpainUnión Española de Entidades Aseguradoras y Reaseguradoras (Unespa)

Satu HuberManaging DirectorFI — FinlandFinanssialan Keskusliitto

Jean-Marc BoyerDirector GeneralFR — FranceFédération Française des Sociétés d’Assurance (FFSA)

45


Margarita AntonakiGeneral DirectorGR — GreeceHellenic Association of Insurance Companies

Hrvoje PaukovićManagerHR — CroatiaHrvatski ured za osiguranje

Zoltán ForgácsExecutive DirectorHU — Hungary Magyar Biztosítók Szövetsége (MABISZ)

Michael KempCEO IE — IrelandIrish Insurance Federation (IIF)

Guðjón RúnarssonManaging DirectorIS — IcelandSamtök Fjármálafyrirtækja (SFF)

Giampaolo GalliDirector GeneralIT — ItalyAssociazione Nazionale fra le Imprese Assicuratrici (Ania)

Heiner KeilPresidentLI — LiechtensteinLiechtensteinischer Versicherungsverband e.V.

Andrius RomanovskisDirectorLT — LithuaniaLietuvos draudiku asociacija

Paul HammelmannLegal AdvisorLU — LuxembourgAssociation des Compagnies d’Assurances (ACA)

Juris DumpisPresidentLV — LatviaLatvijas Apdrošinātāju asociācija (LAA)

Anton FeliceDirector GeneralMT — MaltaMalta Insurance Association

Richard WeurdingGeneral ManagerNL — NetherlandsVerbond van Verzekeraars (VVN)

Arne SkaugeManaging DirectorNO — NorwayFinansnæringens Hovedorganisasjon (FNH)

Tomasz Mintoft-Czyż PresidentPL — PolandPolska Izba Ubezpieczeń (PIU)

46


Alexandra QueirozGeneral ManagerPT — PortugalAssociação Portuguesa de Seguradores (APS)

Florentina AlmajanuDirector GeneralRO — RomaniaUniunea Naţională a Societăţilor de Asigurare şi Reasigurare (Unsar)

Christina LindeniusManaging DirectorSE — SwedenSveriges Försäkringsförbund

Mirko KalužaDirectorSI — SloveniaSlovensko Zavarovalno Združenje (SZZ)

Jozefína ŽákováDirector General SK — SlovakiaSlovenská asociácia poisťovní

Erhan TunçaySecretary GeneralTR — TurkeyTürkiye Sigorta ve Reasürans Şirketleri Birliği

Stephen HaddrillDirector GeneralUK — United KingdomAssociation of British Insurers (ABI)

Margarita AntonakiGeneral DirectorGR — GreeceHellenic Association of Insurance Companies

Hrvoje PaukovićManagerHR — CroatiaHrvatski ured za osiguranje

Zoltán ForgácsExecutive DirectorHU — Hungary Magyar Biztosítók Szövetsége (MABISZ)

Michael KempCEO IE — IrelandIrish Insurance Federation (IIF)

Guðjón RúnarssonManaging DirectorIS — IcelandSamtök Fjármálafyrirtækja (SFF)

Giampaolo GalliDirector GeneralIT — ItalyAssociazione Nazionale fra le Imprese Assicuratrici (Ania)

Heiner KeilPresidentLI — LiechtensteinLiechtensteinischer Versicherungsverband e.V.

Andrius RomanovskisDirectorLT — LithuaniaLietuvos draudiku asociacija

Paul HammelmannLegal AdvisorLU — LuxembourgAssociation des Compagnies d’Assurances (ACA)

Juris DumpisPresidentLV — LatviaLatvijas Apdrošinātāju asociācija (LAA)

Anton FeliceDirector GeneralMT — MaltaMalta Insurance Association

Richard WeurdingGeneral ManagerNL — NetherlandsVerbond van Verzekeraars (VVN)

Arne SkaugeManaging DirectorNO — NorwayFinansnæringens Hovedorganisasjon (FNH)

Tomasz Mintoft-Czyż PresidentPL — PolandPolska Izba Ubezpieczeń (PIU)

47


CEA committee chairpersons

Life Insurance Gérard MénéroudDeputy Chief ExecutiveCNP (FR)

Health Insurance Pim van de WerdDirector, Kennis en Beleidscentrum ZorgAvéro Achmea (NL)

Accident InsuranceUwe BreuerDirectorR+V Allgemeine Versicherung (DE)

Motor InsuranceFrançois BucchiniChairman AXA Cessions (FR)

General Liability InsurancePhilip BellGroup Casualty DirectorRSA (UK)

Legal ExpensesGustaaf DaemenChief Executive OfficerDAS (BE)

Atomic RisksChristoph StalderPublic Affairs DirectorSchweizerische Mobiliar Holding (CH)

Agricultural RisksAntonio Fernández TorañoChairmanAgroseguro (ES)

Insurance of the Person

Non-Life Insurance

48


Single MarketAlastair Evans Head of Government & International Regulatory Affairs Lloyd’s (UK)

International AffairsBrigitte BovermannExecutive Vice-PresidentAllianz (DE)

Economics and FinanceJoseph B.M. StreppelChief Financial OfficerAegon Verzekeringen (NL)

Social AffairsSebastian HopfnerDirector, Legal DepartmentAGV (DE)

Communication & PRPatrick Nally Director of Marketing & Public RelationsRSA (IE)

Community Affairs

General Affairs

Motor InsuranceFrançois BucchiniChairman AXA Cessions (FR)

General Liability InsurancePhilip BellGroup Casualty DirectorRSA (UK)

Legal ExpensesGustaaf DaemenChief Executive OfficerDAS (BE)

Atomic RisksChristoph StalderPublic Affairs DirectorSchweizerische Mobiliar Holding (CH)

Agricultural RisksAntonio Fernández TorañoChairmanAgroseguro (ES)

49


CEA staff

General Management

Michaela Koller Director General

Gina O’Rourke Executive Assistant

Danny Dehaes Executive Secretary

all e-mails = [surname]@cea.eu

Economics & Finance

Alberto Corinti Deputy Director General, Director, Economics& Finance

Catherine MuntPolicy Advisor/TechnicalManager, Solvency II

Marta González Policy Advisor/TechnicalManager, Solvency II(secondee)

Catherine GoislotPolicy Advisor, Economics & Statistics

Yannis Pitaras Project Manager,Solvency II

Silvia Herms Policy Advisor/TechnicalManager, Solvency II

Ido BruinsmaPolicy Advisor, International Affairs & Reinsurance

Valérie ReinSecretary

Benoit MalpasPolicy Advisor/ Technical Manager

Mohamed Selmaoui Policy Advisor/TechnicalManager, Solvency II

Luc Stevens Policy Advisor, Economics & Statistics

Anne HalbardierSecretary

Insurance of the Person

Kai-Marjep KosikHead of Department

Caroline BisseggerPolicy Advisor, Insurance of the Person(secondee)

Cláudia SousaPolicy Advisor, Taxation

50


Human Resources, Accounts & IT

Koen AmeyeHuman Resources Manager

Corentin PolletICT, Information Systems, Logistics

Brigitte ThomassenAdministrative Assistant

Non-Life Insurance

Sandrine NoëlHead of Department

Ana SolomiakSecretary, Non-Life Insurance and Insurance of the Person

Hakima Ben AzzouzPolicy Advisor

Kathrin HoppePolicy Advisor

Communications & Public Relations

Janina Clark Head of Department

Annemarie Bos Policy Advisor

Public Affairs

Gabriela DiezhandinoHead of Department

Frida BergmanPolicy Advisor

Amélie Chantrenne Secretary, Public Affairsand Communications & Public Relations

Single Market & Social Affairs

William Vidonja Head of Department

Claudine BriguéSecretary

Francesco ZanellaPolicy Advisor

Alina DomaradzkaPolicy Advisor

Alberto Corinti Deputy Director General, Director, Economics& Finance

Catherine MuntPolicy Advisor/TechnicalManager, Solvency II

Marta González Policy Advisor/TechnicalManager, Solvency II(secondee)

Catherine GoislotPolicy Advisor, Economics & Statistics

Yannis Pitaras Project Manager,Solvency II

Silvia Herms Policy Advisor/TechnicalManager, Solvency II

Ido BruinsmaPolicy Advisor, International Affairs & Reinsurance

Valérie ReinSecretary

Benoit MalpasPolicy Advisor/ Technical Manager

Mohamed Selmaoui Policy Advisor/TechnicalManager, Solvency II

Luc Stevens Policy Advisor, Economics & Statistics

Anne HalbardierSecretary

51


CEA aisbl

Square de Meeûs 29

B-1000 Brussels

Belgium

Tel: +32 2 547 58 11

Fax: +32 2 547 58 19

www.cea.eu

CEAInsurers of Europe

Documents

1213352215 Cea Annual Report Web