Marc Hengen (ACA): State of the Union
Marc Hengen, Chief Executive of the Luxembourg Insurance and Reinsurance Association (ACA), shares his views on the implementation of PRIIPs, his predictions for the insurance market in 2017 and the increasing impact of digitalisation on insurers’ operations.
What initiatives is ACA set to undertake in 2017?
2017 is going to be an important year to lay down the foundation work to prepare for the EU’s legislation on Packaged Retail and Insurance Based Investment Products – PRIIPs – which will come into force on 1st January 2018. PRIIPs and Key Information Documents – KIDs – are designed to improve the quality and transparency of information provided to consumers by financial and insurance players. Our association will do what it takes to ensure an easy transition. In addition, ACA and Luxembourg for Finance will focus on promoting Luxembourg as a financial centre abroad by jointly organising two different events in Sweden and Milan. ACA will independently organise conferences in Geneva and Madrid.
How does ACA see today’s insurance market?
The Luxembourgish market is characterised by the fact that a significant proportion of its margins comes from non-residents. Our main target markets are located in France, Italy, Germany and Belgium. We therefore pay close attention to their evolution. The added value of Luxembourg’s insurance sector lies in life insurance and wealth management. In the latter sector, insurers are working on a single yearly premium basis. Their results vary from one year to another, but we feel positive about results in 2017. We believe that our members’ specialisation and competencies will further optimise their operations. Furthermore, general economic indicators have been positive for the Grand Duchy in 2016 and we hope that the situation will continue to improve in 2017.
What impact are new technologies having on ACA and their members?
For ACA, the growing influence of the digitalisation process can be observed in two major areas. Firstly, we’re currently moving towards systems which provide 24/7 insurer-client services. Information on coverage and assets is now nearly instantaneous, but the provision of those services involves transition costs which need to be integrated in our operations. In addition to this, the digitalisation process also involves a restructuring of administrative procedures within firms. Efficient client servicing therefore has clear competitive and strategic undertones for insurers. A further impact will be felt in the car insurance sector with the arrival of autonomous driving cars on the market. They have been proved to reduce the risk of accidents considerably. Insurers will have to adapt to this accordingly.