However, digitalisation not silver bullet to remove cross-border barriers
While the digitalisation of the European insurance industry will reshape the way insurers innovate, distribute and interact with their customers, it cannot remove all barriers to increasing the volume of cross-border insurance, according to Insurance Europe, the European insurance and reinsurance federation.
In its response to a consultation on the European Commission Green Paper on Retail Financial Services, Insurance Europe said that the European insurance sector is embracing digitalisation to respond efficiently and in a timely manner to consumer demands. Insurance Europe said that increased digitalisation can offer significant benefits to policyholders, such as more efficient claims-handling, easier customer identification and increased comparability of products.
Michaela Koller, director general of Insurance Europe, commented: “Digitalisation has the potential to bring a wide range of benefits to policyholders. However, it cannot remove all of the obstacles that currently stand in the way of increasing the amount of cross-border retail insurance products.”
Insurance Europe also noted that, while the objective of offering consumers and businesses more opportunities to move and operate within the single market is welcome, the expansion of cross-border insurance within the EU should remain market-driven.
Koller said: “The design of insurance products reflects the market and regulatory conditions of the country in which they are sold, which in turn influences the risk a particular policyholder represents. Therefore, premium comparisons between member states should only be done with great care. The need to adapt products, including the claims-handling process, to a particular market also explains why not all companies decide to operate in various markets.”
In its response, Insurance Europe also outlined several areas where action by the European Commission would be welcomed. These include: