​According to Marc Lauer, Vice-President and former President of the ACA(2020-2022), regulation, CSR and digitalization are the main challenges facing the insurance and reinsurance industry in 2022. After a year of general progress, the sector must maintain its efforts to remain competitive on the international scene. Interview. 

 

What are the ACA's current priorities? 

I can identify four: First, our industry is currently facing a regulatory challenge. The Solvency II update, introduced ten years ago, has made the calculation of solvency requirements more complex. We are also closely monitoring new barriers that are being considered to limit the freedom to provide services. The possibility of strengthening the powers of the host authority from 5% of services provided abroad would make our activities even more complex. Our second priority is to support the sector in the implementation of CSR strategies. Our goal is to see a real CSR impact in the actions and services provided by the sector. We must therefore ensure that we clearly formulate our objectives in this area in order to act in accordance with regulations and political intentions. The third priority is that the inability of insurance companies to outsource their cloud services abroad (due to the current insurance secrecy provisions) is an obstacle to the digitalization of our sector and its competitiveness on the international scene. Of course, we will always ensure that we protect our customers' data in accordance with GDPR regulations, but the provisions of Article 300 on insurance secrecy are so demanding with regard to collecting customer consent that they are impossible to implement in practice. Finally, our last challenge focuses on increased vigilance in the fight against money laundering and terrorism. A visit of the FATF is still expected in Luxembourg and we are aiming for a clean slate! 

 

"A visit of the FATF is still expected in Luxembourg and we are aiming for a clean slate!" 

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How is the insurance sector in Luxembourg evolving? 

Despite the regulatory difficulties, the sector is generally developing well in Luxembourg, because the environment here is more business-oriented than elsewhere. This is due in particular to a strong ecosystem, including the banking sector; a solid IT/Fintech set-up and a regulatory framework that complies with all European requirements and is enforced by a dedicated supervisory authority. 2021 was a very good year. Life insurance reached the same level as 2019, which promises us growth of over 40% compared to 2020. In non-life insurance, our business grew by 10%, especially with the arrival of new players following the Brexit. 

 

What risks and opportunities do you see in the medium term? 

Cumbersome regulations are the first risk that small companies, of which there are many in Luxembourg, will find it more difficult to cope with. In addition, the climate crisis means that we need to develop models for assessing natural disasters, and we may need to think about public-private financing models, as observed abroad. Finally, we need to find the right talents to support us in these challenges. In terms of opportunities, digitalization offers new ways to communicate with clients and collaborate with our partners. It also has a positive impact on the production and processing of data that allows us to better understand our clients' expectations. We must seize this opportunity to prevent it from becoming a risk.