COVID-19 (Coronavirus): what impacts on insurance intermediaries in Europe ?
CGPA Europe provides an overview of the measures taken by various European Union Member States to deal with the COVID-19 (Coronavirus) pandemic, which have an impact on the insurance sector.
EIOPA issues a series of recommendations
The European Insurance and Occupational Pensions Authority (EIOPA) expressed in a press release its recommendations on dividend distribution and variable remuneration policies. Considering the uncertainty about the economic impact of the pandemic, EIOPA urges that at the current juncture (re)insurers temporarily suspend all discretionary dividend distributions and share buy backs aimed at remunerating shareholders. This prudent approach should also be applicable to the variable remuneration policies.
EIOPA underlines the importance of maintaining the services to policyholders. In this sense, insurance companies should be ready to implement the necessary measures to ensure business continuity. Furthermore, EIOPA highlightes that, in order to offer operational relief in reaction to coronavirus, national competent authorities (NCAs) should be flexible regarding the timing of supervisory reporting and public disclosure regarding end 2019. EIOPA will coordinate the specifics of the approach. In order to ensure that the priorities are consistent with the current situation, EIOPA published a recommendation to foster convergence and consistent supervisory approaches across Member States when providing flexibility for supervisory reporting and public disclosure of insurance and reinsurance undertakings.
European Data Protection Board (EDPB): “Data protection and public health go hand in hand”
During its 23rd plenary session, the European Data Protection Board (EDPB) adopted guidelines on the processing of health data for research purposes in the context of the COVID-19 outbreak. Indeed, due to the COVID-19 pandemic, there are currently great scientific research efforts in the fight against the SARS-CoV‑2 in order to produce research results as fast as possible. At the same time, legal questions concerning the use of health data pursuant to Article 4 (15) GDPR for such research purposes keep arising. These guidelines aim to shed light on the most urgent of these questions such as the legal basis, the implementation of adequate safeguards for such processing of health data and the exercise of the data subject rights.
The EDPB also adopted guidelines on geolocation and other tracing tools in the context of the COVID-19 outbreak. These guidelines clarify the conditions and principles for the proportionate use of location data and contact tracing tools, for two specific purposes :
- Using location data to support the response to the pandemic by modelling the spread of the virus so as to assess the overall effectiveness of confinement measures ;
- Contact tracing, which aims to notify individuals of the fact that they have been in close proximity of someone who is eventually confirmed to be a carrier of the virus, in order to break the contamination chains as early as possible.
The EDPB has taken position on the fact that the use of contact tracing applications should be voluntary and should not rely on tracing individual movements but rather on proximity information regarding users.
ITALY — Italian companies stand out for their dynamism
EMFGroup, an Italian marketing consultancy firm, has analysed several insurance product offerings created by insurance companies and banks as a result of the pandemic, and in particular their technical and service performance. Here are the predominant orientations of these offers : extension of the coverage already provided for in the policies ; indemnity not only in the event of hospitalisation, but also during isolation at home (quarantine), without the application of deductibles following a positive diagnosis of contagion. Marcella Frati president of EMFgroup said that “Insurance companies have innovated by proposing not only interventions in favour of agents, but also actions for the direct protection of their clients, often considerably broadening the components of the reimbursement or service offered. This demonstrates considerable dynamism and a great capacity to respond to market developments on the part of the entire sector”.
GREECE — The negotiation of Greek insurance intermediaries
The Greek association of insurance intermediaries has launched a discussion with the government, achieving some results :
- Inclusion of the insurance brokerage industry among the sectors targeted by economic support interventions ;
- Possibility of reducing monthly social security contributions by 25% for the entire duration of the crisis ;
- Possibility of reducing office rents by 40%;
- The insurance companies have accepted many requests from intermediaries, for example the extension of the cancellation conditions of insurance policies for various sectors.
The association’s list of requests also includes :
- The implementation of measures (with the participation of the State) aimed at reducing working time ;
- Tax exemption on life and real estate premiums.
UK – Guidance on COVID-19 Business Interruption Claims and increase in car insurance premiums
New FCA Guidance on COVID-19 Business Interruption Claims
The Financial Conduct Authority (FCA), the financial regulatory authority in the United Kingdom, highlighted in a “Dear CEO” letter that there are policies where it is clear that the firm has an obligation to pay out on a policy. For these policies, it is important that claims are assessed and settled quickly. A key objective of the FCA is to ensure that financial pressures on policyholders are not exacerbated by slow payment ; rather, such claims should be paid as soon as possible.
“If there are reasonable grounds to pay part of the claim but not to make the payment of such claims in full, we would like you and your Board to adopt an approach of making an interim payment. Many firms are already doing this” recommended the Authority.
UK motor premiums continue to rise amidst COVID-19 pandemic
Amidst the current public health crisis and global pandemic, premiums continue to accelerate in the motor insurance market, with prices rising 2.8% in the last 3 months, totalling a 5.5% increase in the last year, according to the latest figures from data insight specialist, Consumer Intelligence.
FRANCE — A general mobilisation in the insurance industry
“A new insurance-type system, capable of covering large-scale health disasters”
Florence Lustman, president of the Fédération Française de l’Assurance (FFA) stated that : “Traditional protection mechanisms are not sufficient to deal with such crises. Insurance cannot take the place of the State. Nevertheless, it can shoulder its responsibilities in accordance with its capabilities – and indeed it is already doing so – and put forward proposals for the future. One thing we can do now to prepare for future crises of this type is to think about the basis of an insurance-type system that would be able to cover large-scale health disasters.
We must not, however, make the mistake of thinking that insurers can cover such events on their own. The system must be based on a partnership with the State. The Fédération Française de l’Assurance has decided to launch a debate with the aim of submitting proposals to the public authorities in this regard”.
3.2 billion euros in exceptional measures to meet the challenges of COVID-19
In order to give their insurance customers maximum support to deal with the consequences of the health crisis, French insurers have taken a series of non-contractual measures totalling 1.75 billion euros, in solidarity with the populations and businesses most at risk. Half that initiative is dedicated to VSBs, SMEs, craft businesses and retailers. The industry has therefore doubled its contribution to the solidarity fund set up by government to provide help for those businesses, increasing its contribution to 400 million euros.
Also, as long-term investors, French insurers have given an undertaking to government to support the country’s economic recovery after the health crisis. They have set up a global investment programme involving at least 1.5 billion euros, mostly from equity, in particular for ISEs and SMEs and the health sector.
A fixed-term industry agreement on paid holidays
French social partners and the trade unions representing the brokerage industry have concluded a fixed-term industry agreement on paid leave to help the profession cope with the coronavirus crisis.
Constructive negotiations made it possible to “conclude a fixed-term branch agreement on paid leave, which allows the employer to decide to take 6 days of paid leave acquired by the employee, or to unilaterally modify the dates on which paid leave is taken”, says a press release.
BELGIUM – Belgium puts real-time information at the center of its concerns
Feprabel has created a special COVID-19 page on its website, aimed at keeping insurance intermediaries informed of the latest news.
In order to help intermediaries in their efforts, FEPRABEL offers information and solutions gathered in a special COVID-19 file, modified and completed according to the situation and the decisions taken by the competent authorities.
A call center dedicated to covid-19
Several measures to mitigate the impact of the coronavirus crisis on consumers, the self-employed and businesses have been announced. These measures come from the authorities as well as from the banking and insurance sectors, and are aimed at people and companies financially affected by the coronavirus crisis and provide, for example, for a deferral of mortgage payments, a deferral of tax payments and a deferral of insurance premiums and second pillar pension contributions.
As the supervisory authority in charge of consumer protection in particular, the Financial Services and Markets Authority (FSMA), has set up a call center for all those who have questions about these measures.
IRELAND — Consumer-focused concerns
Central Bank of Ireland Expectations of Retail Intermediaries in Light of COVID-19
The Central Bank expects Retail Intermediaries to take account of the difficult and challenging situation in which many customers find themselves, through no fault of their own and to take steps to support them. The challenges posed are unprecedented and will require a swift yet carefully considered approach to achieve the right outcomes for customers.
All Retail Intermediaries need to be sensitive to changes in customers’ circumstances due to the public health measures taken to counter the spread of COVID-19, which have left many in a financially vulnerable situation.
Insurance Ireland announces forbearance and other measures to help customers during the Covid-19 crisis
Insurance Ireland, an institution which gathers 95% of national insurance market players, has written to the Minister for Finance, Paschal Donohue, outlining a comprehensive range of measures that the sector is taking to assist customers during the current Covid-19 crisis.
The measures include reduced premiums for business customers to reflect reduced level of exposure as a result of Covid-19 restrictions for EL / PL and Commercial Motor ; renewal flexibility ; maintenance of existing cover where the premises is closed or unoccupied ; support change of use during Covid19 crisis.
Insurance Ireland states that most standard business interruption policies in the Irish market do not support a claim for a pandemic such as Covid-19. This is also the position in the UK and across Europe. However, insurers are very mindful of their commitments to the customer and will adjudicate each claim fairly and consistently in line with the policy terms and conditions.