Insurance Europe Update on EU Retail Investor Strategy

If anyone was in any doubt that politicians fail to understand business or long term planning, then the latest update from Insurance Europe on consumer investment in stocks, savings, insurance plans, start-ups, digital assets and much more, proves the point. The response from politicians can be summarised as follows; more regulations, more warnings about losing money, more upfront box ticking on affordability.

All these things disproportionately affect the poorer, low level investor, who is attracted to things like IBIPs, due the insurance backed aspect and with-profits elements. In effect many long term policies with profits are higher rate savings plans and whilst there are risks due to regular stock market meltdowns, in the long term such investments often beat low interest bank savings accounts, even higher interest 12 month/notice accounts.

Here’s the update from Insurance Europe;

As technical discussions in the European Council and European Parliament kick-off, Insurance Europe has published a series of key messages on the Retail Investment Strategy (RIS) package. The European insurance industry firmly supports the European Commission (EC)’s objectives of the RIS: to increase retail investors’ participation in financial markets, while protecting them from mis-selling practices.

Some positive aspects exist in the proposals, including the introduction of a digital-by-default approach, more streamlined consumer information, financial education, consumer testing, and the flexibility for member states to impose further restrictions when suitable for their respective markets. At the same time, many proposals in the RIS would make it considerably more complicated for consumers to invest and access the products and protection they need. It would further add to the already information overload and would reduce consumer choice and quality of services.

Overall, the RIS would not achieve its intended goals.

What are the solutions?

1. Allow the coexistence of different remuneration systems so that access to IBIPs is guaranteed for all

2. Remove additional requirements that will make the consumer journey harder

3. Move from a cost-centric to a consumer-centric approach

4. Favour a risk-based approach to value for money supervision

5/ Make disclosures more user-friendly and address the information overload

The potential of insurers to fully contribute to the EU’s Capital Markets Union objectives should not be hindered by the RIS. Further efforts must be undertaken to ensure that the opportunities offered by the EC proposals are not wasted.

About alastair walker 12099 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.