In a response to a European Insurance and Occupational Pensions Authority (EIOPA) consultation on a Supervisory Statement on exclusions in insurance products for risks arising from systemic events, Insurance Europe has made recommendations for how to clarify the scope and objectives of the Supervisory Statement.
Insurance exclusions and product reviews are not bad per se; since there are limits to what can be insured, as EIOPA itself recognises. And if a risk becomes uninsurable, insurers need to revise their coverage and exclusions to ensure they remain able to offer cover for insurable risks and pay insurable claims.
In its response to the consultation, Insurance Europe stresses that clear communication and thorough product reviews are the key to building solid and long-lasting relationships with customers. It points out that the EU Insurance Distribution Directive — including its product oversight and governance requirements and Insurance Product Information Document (IPID) — provides a solid basis from which to address consumers’ needs and requires that insurance distributors act honestly, fairly, professionally and in the best interests of their customers.
European insurers also implement their own initiatives to enhance consumer protection and ensure that consumers are properly informed and treated fairly. They continually seek to improve their services in order to remain competitive in a fast-changing world: developing innovative products and services; improving the clarity and transparency of the information about them; offering more risk-management advice and assistance; and developing best practices in the conduct of their business. Insurers also invest significantly in research.
More specifically, following the outbreak of COVID-19 and the invasion of Ukraine, efforts have already been made by the insurance sector to clarify and convey information about exclusions, within the limits imposed by legal and regulatory requirements.