EIOPA priorities: Consumer protection in a disruptive environment
Continuous advisory as answer and sales opportunity
The European Insurance and Occupational Pensions Authority (EIOPA) has defined its strategic priorities until 2026. Due to increasing challenges, risks and opportunities they focus on managing uncertainty in times of change.
Within the three-year cycle, national competent authorities will focus, among other things, on consumer protection in a disruptive environment. Accordingly, insurance companies and financial distributors must ensure that products meet the needs, objectives and characteristics of the target market, also considering the current macroeconomic environment. The aim is to ensure that customers only buy insurance products that suit them, which is already known from the product governance as part of the IDD.
Digital advisory solutions continuously support insurance companies and financial distributors. On the one hand with an ongoing target market review, on the other, by ensuring individual alignment with the demands and needs of customers. Further advantages are obvious: higher quality of advice and consistent customer interaction.
While the focus of national competent authorities will be on investment products, the review of other insurance products will probably also be considered due to the high inflation. The aim for both, insurance companies and financial distributors, is to ensure that customers are treated fairly, including the question of whether the products are still suitable considering current macroeconomic trends. Therefore, annual risks and needs checks can be a significant game changer. They allow to identify and close gaps in coverage at an early stage and to minimize or completely avoid damages caused by underinsurance.
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Continuous advisory processes are therefore increasingly important in volatile times. They not only create transparency for customers, but also have a verifiable positive effect on customer loyalty. This applies to property and casualty insurances as well as life insurances. It is recommended to take a regular look at the achievement of the selected investment objectives and to review the selected risk class.
To quickly and comprehensively record changes in customers' life situations, the annual review process is the optimal basis for the subsequent product advice or product-specific gap calculator to determine adjustment requirements. It is more efficient to analyze the current life situation in advance in order to determine which product requires further advice. The annual review process only takes a few minutes and is illustrated in an example for existing customers below.
