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Current SME definition does not work for insurers

Insurance Europe has published a position paper in response to a European Commission consultation on its review of the definition of small and medium-sized enterprises (SMEs).

While acknowledging the value of having a common definition for genuine SMEs, Insurance Europe said that — due to the specific nature of insurance products and the business model of insurers — the current definition does not achieve its aims for insurers.

In particular, Insurance Europe warned that it could result in small and medium-sized insurers not being recognised as such. Therefore, the definition of SMEs should be amended to better reflect the insurance industry’s specificities. In particular:

  • The balance sheet criterion should be replaced with technical provisions.
  • The turnover criterion should be interpreted as the gross written premiums.
  • Insurance specific thresholds should be set for both of these criteria.
Published 26 April 2018