Mindsets amongst regulators in the insurance industry must change to be more conducive to innovation, according to panellists at the 2018 European Insurance Forum.
Speaking on a panel covering the regulation of innovative insurance market, William Vidonja, head of the conduct of business at Insurance Europe, suggested that a change in mindsets was needed.
Vidonja explained: “Regulation should be conducive to innovation. That means that regulatory framework should allow consumers, the industry, the existing insurers and also the challengers to take advantage and benefit from all the different opportunities that digitalisation and new technologies can bring.”
“Is this the case today? From my experience when I look at European regulatory frameworks, I would say no.”
He added: “The regulatory framework at a European level is not digitally friendly, it is not innovation-friendly.”
Vidonja stated there was an “urgent need” for policymakers to remove “barriers on innovation and digitalisation”.
“That doesn’t mean introducing new rules, it means reviewing the existing rules and ensuring they are fit for innovation and digitalisation.”
Another of the panellists, Dan Forgeron, president and CEO of the Insurance Bureau of Canada, agreed with Vidonja and added that a “mindset change” was necessary “on behalf of the regulators”.
He said: “The words regulation and innovation in the same sentence do not work at opposite ends, they are not mutually exclusive. I do think it is going to take a mindset change on behalf of the regulatory community.”
Speaking on the issue of regulation, Rory Moloney, CEO of Aon Global Risk Consulting, said the two main requests from a captive perspective were proportionality and consistency.
Moloney noted that Solvency II has been a massive undertaking and development for captives and a “very successful one”, but questioned whether the one size all format was warranted.
He continued: “A couple of years in Solvency II has been a positive thing. As the profile of the risks evolves and as the regulatory environment grows is there a context for proportionality to be introduced from that perspective?”
“On consistency, the issue is different regulators in different jurisdictions having different interpretations of the same rules.”
“The phrase one of my client uses is that the ingredients are the same, but the cake tastes different.”