Senior European industry bosses say ‘insurers are not banks’
Leading European insurance bosses in the Pan-European Insurance Forum have called for changes to regulation to recognise insurers are not the same as banks.
The report, Regulatory Consequences of Financial Crisis says:
- Policy makers reacting to the financial crisis need to take into account that the business model of the insurance industry differs substantially from that of other financial services sectors.
- Specifically, insurers do not generate the kind of systemic risk that arises in banking. Government interventions in support of insurance companies have to be carefully evaluated and justified against insurance specific criteria.
- As the regulatory environment in financial services is being redefined, we recommend that new legislation should be targeted, balanced, and calibrated by the expected impact it will have on the economy. It should also enhance the working of existing regulations, safeguard the level playing field, and further enhance global consistency
"Stakeholders reacting to the financial crisis need to take into account that the business model of the insurance industry differs substantially from that of the other financial services providers" said Henri de Castries, PEIF chairman. He also added that "insurers do not generate the kind of systemic risk that arises in banking".
The report also said the insurance industry had to make its voice heard.
Key recommendations for policy makers were:
- Public policies should provide incentives for sound risk and capital management
- Large complex financial institutions (LCFI) have to be supervised in their entirety
- Regulators must step up their efforts to achieve convergence in
- accounting standards
- Much greater transparency is needed for structured financial products
- Government intervention must not distort markets. Support may be necessary in the short-term to stabilise the financial system and support institutions but it should be subject to sunset clauses and removed as quickly as possible.
The paper is supported by:
Stefan Lippe – chief executive officer – Swiss Re
Sergio Balbinot – managing director – Assicurazioni Generali
Henri de Castries – chief executive officer and chairman – AXA Group
Michael Diekmann – chairman – Allianz SE
Andrew Haste – group chief executive– RSA Insurance Group plc
Konstantin Klien – chief executive officer and chairman – UNIQA Versicherungen AG
José Manuel Martinez – chairman and chief executive officer – MAPFRE
Andrew Moss – chief executive officer – AVIVA plc
James J. Schiro – chief executive officer – Zurich Financial Services
Dr Nikolaus von Bomhard – chairman – Münchener Ruckversicherungs-Gesellschaft
Alex Wynaendts – chairman – AEGON N.V