Insurance EuropeInsurance Europe
5th International Insurance Conference

Around 350 insurers, policymakers and regulators gathered in Rome, Italy, on 13 June 2013 for Insurance Europe’s 5th International Conference. Entitled “Stability and security: insuring our futures”, the full-day conference debated the insurance industry’s role in the global economy and how global regulatory initiatives can affect that role — either positively or negatively.

Opened by Fabrizio Saccomanni, Italy’s Economy and Finance Minister, the event featured keynote speeches by Global Federation of Insurance Associations (GFIA) chairman Frank Swedlove; International Association of Insurance Supervisors (IAIS) chairman Peter Braumüller; Burkhard Balz MEP; and Eurofi president Jacques de Larosière.

One theme that ran through the conference was the role of insurers as long-term investors. The insurance industry is one of the world’s largest institutional investors with well over €8trn in assets under management in Europe and more than $27trn (€19.5trn) held in assets globally. The long-term funding provided by the sector is therefore a vital component of sustainable economic growth, fostering financial stability by providing an anti-cyclical buffer in times of market stress.

Yet various policy trends — especially in prudential regulation and taxation — intended to reinforce financial stability can unintentionally affect insurers’ appetite to invest long-term. Insurance Europe president Sergio Balbinot highlighted that if regulations create unnecessary and artificial volatility in insurers’ balance sheets, insurers have only two options: stop selling long-term guarantee products or radically change their asset allocation.

As this would have a dramatic impact on EU and worldwide economy and stability, Balbinot called on regulators and policymakers to ensure that insurance companies are not discouraged from investing in long-term assets. “The vital role of insurers as institutional investors must be preserved,” he insisted. This was echoed by many speakers during the day.

Another topic that dominated the discussions was the interlinking and interconnectedness of regulatory initiatives around the world. The financial crisis caused a paradigm shift in international financial regulation, but no legislation or regulation can be drafted in isolation and the wider implications of each initiative need to be considered.

A frequently cited example in this area was the international move to identify and reduce possible systemic risks in the financial sector to try to avoid any repeat of the problems that arose during the crisis. Many speakers highlighted that there is little evidence of traditional insurance either generating or amplifying systemic risk and stressed that any policy initiatives should focus on the few non-traditional and non-insurance activities carried out by insurers that have the potential to create systemic risk.

Keynote speaker and GFIA chairman Frank Swedlove explained that the shift towards international regulation of the industry created a need for more formal cooperation and coordination by the global insurance industry. In response the GFIA was established as a unified voice for the industry and to provide a single point of contact for regulators. Swedlove pointed out the enormous advantages: “Regulators know that when GFIA takes a position it is supported by essentially the entire industry around the world.”

A third issue that frequently arose during the debates was consumer protection and conduct of business. Speakers expect these issues to be on the international agenda for the next 10–15 years, also in the area of supervision. Keynote speaker and IAIS chairman Peter Braumüller confirmed that policyholder protection was one of the core objectives of the IAIS.

An exhibition of successful road safety initiatives carried out by the national associations was also shown at the conference. The video features media initiatives that have been running in France, Spain, Greece, Italy and the Netherlands.

Published 13 June 2013
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Amélie Chantrenne
Amélie Chantrenne
Event coordinator