Insurance sector must remain resilient amidst emerging global risks

The sector must build a fair and inclusive market for all consumers.

The insurance sector was urged to be resilient amidst volatility and increasing global risks during the European Insurance and Occupational Pensions Authority (EIOPA) Conference last 21 November.

Petra Hielkema, Chairperson of EIOPA, cited ongoing wars, climate change, and the rapid development of artificial intelligence as key challenges for the insurance sector.

She noted that to overcome these, the sector must "truly live its purpose to protect and provide peace of mind." 

“Last year we proposed policy options aimed at increasing the uptake and efficiency of climate catastrophe insurance—whilst creating incentives to adapt to and reduce climate risks,” Hielkema said.

She also said the sector must build a fair and inclusive market for all consumers, noting that only 45% of European consumers believe their insurance-based investment products offer value for money, whilst 30% are unsure, and 25% do not.

Furthermore, the chairperson said better data is crucial to assess risks, understand protection gaps in pensions and insurance, and raise awareness about them. It allows insurers to evaluate the effectiveness of measures in narrowing protection gaps.

“Initiatives like EIOPA’s Natural Catastrophe Hub, which provides open data, show how sharing and leveraging data can benefit the entire industry,” she added.

Moreover, insurers must address the root causes of complexity in regulations, which often result from trying to accommodate too many interests or from combining too many activities under horizontal legislation.