The European Insurance and Occupational Pensions Authority (EIOPA) published, today, its 2019 Consumer Trends Report outlining major developments in the insurance and pensions sectors affecting European consumers.
Improvements in disclosure practices have been seen and digitalisation remains a broadly noteworthy trend, showing that financial innovations can bring benefits for both insurers and consumers, so long as they are adequately designed and properly implemented.
Accident and health insurance products continue being ‘good value-for-money’, with the medical expense line of business having the highest claims ratio and the lowest commission rates for non-life insurance products.
Conduct issues related to unit-linked, credit life/credit protection insurance and add-on insurance products have become more prevalent. Claims management in motor insurance, in particular in some markets, also remains an area of concern.
Unit-linked insurance. Concerns continue on the poor levels of consumer understanding, product complexity, unmitigated conflicts of interests, and poor returns – sometimes due to unnecessarily high costs. Issues were identified on the sale of unit-linked policies to vulnerable consumer groups.
Credit life and credit protection products. These are increasingly under the supervisory scrutiny of NCAs and EIOPA. Even though they can bring significant benefits to consumers, potential for consumer detriment exists given generally high commissions that can lead to unmitigated conflicts of interests and some aggressive sales techniques. A data analysis shows that the ratio of acquisition expenses over gross written premiums, an indicator of commission levels, is high for other life insurance, with 151 insurance undertakings above 30% and 50 above 50%.
Add-on insurance. Despite bringing peace of mind to consumers and generally being a low cost product, add-on insurance is also a potential source of consumer detriment across several European markets. Concerns relate to the possible exploitation of behavioural biases in the context of an increase in cross-selling practices and high commissions.
Innovations in the motor insurance. These are broadly noteworthy, with an increase in policies being sold through comparison websites and an increasing uptake of telematics. However motor insurance-related complaints, due to claims management issues, continue to be the most prevalent complaints and have increased by 6% at the EEA level.
For pensions, with life expectancy increasing, a strain is being put on the decumulation phase. To address this issue, changes and innovations – such as lifecycling or delayed retirement – are taking place.
Moreover, effective and clear communication with members is essential for them to be aware of both the product’s characteristics and their pension situation. Given that more members prefer online and more interactive communication, innovations are taking place across several countries. Publicly or privately run pensions dashboards are also appearing, making it easier for consumers to access information on their overall pension situation.
Looking ahead, although regulatory changes that came into force in 2018 (Insurance Distribution Directive and the Packaged Retail and Insurance-based Investment Products Regulation) are already showing some positive developments — mainly in relation to disclosures — it is anticipated that there will be an increasing focus on product oversight and governance, to ensure that products are adequately designed and targeted, thereby ensuring good consumer outcomes.
Gabriel Bernardino, Chairman of EIOPA, said:
‘Understanding consumer trends is an essential part of our work to identify where customers might suffer because of poor practices or lack of information. Despite evidence of improved disclosures, problems remain with product design and product review processes and undertakings and distributors must take responsibility for improving consumer outcomes. At the same time, where EIOPA identifies areas for concern we will take action. This was the case for certain business models in travel insurance, where EIOPA recently issued a warning. In 2020, we will launch a comprehensive thematic review on mortgage life and other credit protection insurance sold through banks, to gather evidence on areas of potential consumer detriment.
View the whole report here
Compliments of the European Commission

December 12 – At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively. The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
On 1 November net purchases were restarted under the Governing Council’s asset purchase programme (APP) at a monthly pace of €20 billion. The Governing Council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.
The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.
The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today.

On 12 December, EU leaders discussed climate change, the EU’s long-term budget and external relations, among other issues. On 13 December, they focused on the economic and monetary union and Brexit.
Climate change
EU leaders endorsed the objective of making the EU climate-neutral by 2050, in line with the Paris Agreement. They underlined that the transition to climate neutrality will bring significant opportunities for economic growth, markets, jobs and technological development. Poland, at this stage, could not commit to implementing this objective, which is why the European Council will come back to this issue in June 2020.
The European Council took note of the Commission communication on the European Green Deal and asked the Council to take work forward.
Leaders recognised the need to put in place an enabling framework to ensure a cost-effective, as well as socially balanced and fair transition to climate neutrality, taking into account different national circumstances.
The European Council underlined that the next multiannual financial framework (MFF) will significantly contribute to climate action. Tailored support for regions and sectors most affected by the transition will be made available from the Just Transition Mechanism.

“All relevant EU legislation and policies need to be consistent with, and contribute to, the fulfilment of the climate neutrality objective while respecting a level playing field.”
European Council conclusions, 12 December 2019

The European Council recognised that all relevant EU policies need to be in line with the climate-neutrality objective and invited the Commission to examine whether existing rules, including on state aid and public procurement, require adjustment. It also asked the Commission to report regularly on the environmental and socio-economic impact of the transition to climate neutrality.
EU leaders acknowledged the need to ensure energy security and to respect the right of the member states to decide on their energy mix and to choose the most appropriate technologies. Some countries have indicated that they use nuclear energy as part of their national energy mix.
Finally, leaders invited the Commission to prepare:
a proposal for the EU’s long-term strategy as early as possible in 2020 with a view to its adoption by the Council and its submission to the UNFCCC
after a thorough impact assessment, a proposal for an update of the EU’s nationally determined contribution (NDC) for 2030 under the Paris Agreement
Climate change: what the EU is doing (background information)
Taking the lead on climate change (multimedia story)
Long-term EU budget
The European Council discussed the main features of the multiannual financial framework (MFF) for 2021-2027. This followed the presentation of the MFF negotiating box with figures by Finland’s presidency.
EU leaders called on the European Council President Charles Michel to take the negotiations forward with the aim of reaching a final agreement.
Multiannual financial framework for 2021-2027: negotiations
Conference on the Future of Europe
The European Council considered the idea of a Conference on the Future of Europe, starting in 2020 and ending in 2022, to involve the Council, the European Parliament and the Commission in their respective roles.
External relations
EU-Africa partnership
EU leaders reaffirmed the importance of the EU-Africa partnership. They stressed the need for a strategic discussion, on Africa relations and on the next EU-African Union summit, at the June 2020 European Council.
EU-Africa relations (background information)
Relations with Russia
Chancellor Merkel and President Macron informed the leaders about the implementation of the Minsk agreements, following the meeting in Normandy format on 9 December 2019 in Paris. EU leaders agreed to roll over the economic sanctions on Russia for another 6 months.
Turkey
EU leaders discussed relations with Turkey, in light of Turkey’s actions in the Eastern Mediterranean and Aegean Sea. They reconfirmed previous Council conclusions condemning Turkey’s illegal drilling activities in the Eastern Mediterranean. They also denounced the Turkey-Libya Memorandum of Understanding on the delimitation of maritime jurisdictions and reaffirmed their full solidarity with Greece and Cyprus on this matter.
Turkey’s illegal drilling activities in the Eastern Mediterranean: Council adopts conclusions, 14 October 2019
Albania
The European Council expressed solidarity with Albania in light of the recent earthquake. EU leaders welcomed the Commission’s announcement to provide humanitarian assistance and to organise a donors’ conference.
Trade
The European Council reiterated its full support for the global rules-based international order and noted with concern the paralysis of the World Trade Organisation’s (WTO) mechanism for settling disputes.
Leaders supported the European Commission’s efforts to set up interim arrangements with third countries while actively pursuing a permanent solution. In that connection, the European Council called on the European Parliament and the Council to examine the Commission’s proposal to adapt the EU legislation referring to the EU’s rights under international trade agreements.
Economic and monetary union
EU27 leaders took stock of progress made on the implementation of the June 2019 Statement of the Euro Summit, including the:
revision of the European Stability Mechanism (ESM) Treaty
budgetary instrument for convergence and competitiveness (BICC)
technical work on the strengthening of the banking union
Euro Summit, 13 December 2019
Brexit
EU27 leaders discussed Brexit and preparations for the negotiations on future EU-UK relations after the withdrawal. They reconfirmed their aim of establishing as close as possible future relationship with the UK and welcomed the Commission’s decision to reappoint Michel Barnier.
Special European Council (Art. 50), 13 December 2019
Compliments of the European Commission

Today, the European Commission unveiled a proposal that will allow the European Union to protect its trade interests despite the paralysis of the multilateral dispute settlement system in the World Trade Organization (WTO). To further increase the focus on compliance and enforcement of the EU’s trade agreements, the Commission created today the position of Chief Trade Enforcement Officer.
President of the European Commission, Ursula von der Leyen, said: “A stronger Europe in the world implies efficient EU leadership on global trade and appropriate powers to ensure that international trade rules are respected. For that reason, I start my mandate by taking swift action to strengthen our trade toolbox. Today’s proposals will let us defend our interests in these particularly uneasy times for international trade. As many European jobs are at stake, the EU needs to be equipped to ensure that our partners respect their commitments and that’s what this proposal aims for.”
Commissioner for Trade, Phil Hogan, said: “This is a critical moment for multilateralism and for the global trading system. With the Appellate Body removed from the equation, we have lost an enforceable dispute settlement system that has been an independent guarantor that the WTO’s rules are applied impartially. Whilst we seek to reform the WTO and re-establish a well-functioning WTO system, we cannot afford being defenceless if there is no possibility to get a satisfactory solution within the WTO. The amendments we propose will allow us to defend our companies, workers and consumers, whenever our partners do not play by the rules.”
Today’s proposal to amend the existing Enforcement Regulation comes as a direct reaction to the blockage yesterday of the operations of the WTO Appellate Body. The current regulation – a basis under EU law for adopting trade countermeasures – requires that a dispute go all the way through the WTO procedures, including the appeal stage, before the Union can react. The lack of a functioning WTO Appellate Body allows WTO Members to avoid their obligations andescape a binding ruling by simply appealing a panel report.
The Commission’s proposal will enable the EU to react even if the WTO is not delivering a final ruling at the appellate level because the other WTO member blocks the dispute procedure by appealing into the void.
This new mechanism will also apply to the dispute settlement provisions included in regional or bilateral trade agreements to which the EU is party. The EU must be able to respond resolutely in case trade partners hinder effective dispute settlement resolution, for instance, by blocking the composition of panels.
In line with the Political Guidelines of President von der Leyen, the Commission is further reinforcing the Union’s tools to focus on compliance and enforcement of the EU’s trade agreements and created the post of Chief Trade Enforcement Officer that will be filled in early 2020.
Ensuring the respect of the commitments agreed with other trade partners is a key priority of the von der Leyen Commission. The EU is therefore increasing its focus on enforcing its partners’ commitments in multilateral, regional and bilateral trade agreements. In so doing the Union will rely on a suite of instruments. The proposal presented today will now be subject to validation by the European Parliament and the EU Member States in the Council in a normal legislative process.
Compliments of the European Commission