This article was written by Anna Davis.
EIOPA’s expectations from the insurance sector
Mr Bernardino was keen to acknowledge the actions that insurers and intermediaries have taken to serve their customers. EIOPA’s expectations however include:
- the importance of preserving capital - adopt a prudent approach and temporarily suspend all discretionary dividend distributions and share buy backs;
- remember your obligations to your customers and policyholders - this is a confusing time for consumers, who may be anxious about their health, the health of their loved ones and their finances. They should not be anxious about the service provided by their insurance company. Insurers must continue to provide access to and continuity of service. Trust in the sector is essential for a strong recovery, so it is of paramount importance that insurers treat their customers fairly and use discretion where they can;
- the need for clarity in communication – in being explicit about what is and isn’t covered and about contingency measures in place. Take into account the very particular circumstances that people find themselves in.
How the crisis will change the insurance and pensions sector
Digital technology is becoming more essential, more available and more normal. This is going to continue even after the pandemic disappears.
For many consumers, digital technology has been key in maintaining their access to services; insurers are able to keep consumers informed of changes to policies and contingency measures through their digital channels.
Innovation will go beyond this, so that insurers will be able to respond to their customers changing circumstances more quickly. Some insurers are offering payments to their motor insurance customers because they are driving less. This could eventually lead to a growth in ‘pay-as-you-drive’ insurance.
But the industry should also be cautious and make sure that increased digitalisation does not put people at a greater risk to fraud or cybercrime or financial exclusion.
In terms of pensions, EIOPA expects to see the growth of digital first regimes pension and savings products suited to online cross-border sales, like the Pan European Personal Pension product. Simple products that can benefit from economies of scale through digital platforms and simplified distribution regimes fully leverage the opportunities of digitalisation and these products will play an important role in closing the pensions gap.