FIAR 2019: Brokers Conference - Part I

21 May 2019 — Andreea RADU, Bianca CIOCOTISAN
Recent changes brought to the regulatory framework have an impact on players on the brokerage market. What is the cost of adapting to the new legislative requirements? What challenges does IDD bring to the brokerage and insurance companies in the market? Professionals reunited Tuesday, May 21st, at Brokers Conference from FIAR 2019 answered these questions during the debates from the first part of the event.

Participants in the Brokers Conference received 2 training credits from ISF - Institute of Financial Studies, according to the new IDD requirements. The event was supported by OMNIASIG VIG, as MainPartner, as well as DESTINE Broker, CertAsig, ASIROM VIG, BROADSPIRE and ERGO, as Partners.

Some of the speakers from the first part of the conference:
  • Prof. Karel Van HULLE, Catholic University Leuven, Belgium and Goethe University, Frankfurt
  • Paul MITROI, Regulation and Licensing Director, Insurance and Reinsurance Sector, ASF
  • Michael BRANDSTETTER, EU & International Affairs, VVO - Austrian Insurance Association
  • Michael THEILMEIER, Re/Insurance Expert
  • Mihaela CIRCU, Secretar General, APPA
  • Simona DOBRICA, Head of Regulation Office, ASF
  • Dorel DUTA, President, UNSICAR
  • Antonio SOUVANNASOUCK, President, PRBAR
  • Cristian FUGACIU, General Manager, MARSH Romania
  • Viorel VASILE, CEO, SAFETY Broker
  • Costi STRATNIC, Member of the Board, OMNIASIG
  • Steven M. LULEWICZ, Vice President, Global - Strategic Markets & Clients, BROADSPIRE Services

(Part II of the conference can be found here)


Prof. Karel Van HULLE,
Catholic University Leuven, Belgium and Goethe University, Frankfurt

  • The European Commission and the European Parliament want to bring the European Union closer to the citizen
  • If we look at insurance distribution and channels, they are not very transparent many times. This is how it happened with insurance products through investments, which is why it was decided to amend the regulations
  • EIOPA has been given more powers to intervene in cross-border situations, an important aspect because we see that, in several cases, are selling products cross-border and the cooperation between supervisory authorities is not always the way it should be
  • There is also a standardization of customer information for non-life products, insurance products, we are talking about introducing product surveillance and governance requirements, increased transparency and additional requirements for the insurance-based investment product
  • We see market developments, insurtech and digitization, insurance distribution chains, we see operators who are not regulated entities, we see more direct sales of insurance products and a market concentration in the insurance sector of an increased commissioning pressure by insurance companies that want to reduce these costs, in order to be more profitable and increase the outsourcing of the intermediary activity segments
  • We see a new jargon, all abbreviations used in all languages, including Romanian, and specialists need to know all abbreviations, such as IBIP, PRIP, IPID, IDD, ITS, all these words matter, the same abbreviations being used in all languages
  • The rules on conflict of interests matter. One of the IDD changes is that it was considered that a consumer should know more about how the insurance company or intermediary is paid for tge services rendered
  • For the Romanian market, it is important that the commissions are not forbidden. IDD does not prohibit commissions, but requires transparency on payments
  • Member States and Romania may decide that they no longer want commissions. Some countries have done this, Britain or the Netherlands have gone a long way in banning commissions
  • Product supervision and governance is a new aspect and it is important that insurance companies produce an insurance product, but they need to look at how they would fold for the possible product to the potential purchaser
  • There are quite complex rules with regard to insurance-based investment products. The idea of conflict of interest is very important in this case. The question is how many intermediaries will want to sell them because all these organizational aspects are very expensive

Dorel DUTA,
President, UNSICAR

  • We're all making efforts to comply with IDD requirements
  • Brokerage companies will establish and implement policies, rules and procedures regarding the activity carried out, ensuring both a transparent information flow and maintain an adequate level of performance, corresponding to the role they play and to the market in which they opperate
  • We analyzed the legal provisions and tried to highlight these policies, rules and procedures, taking into account the activity and information flow within a brokerage company, from the first interaction with the client until the conclusion of the insurance contract and after-sales assistance. These will serve to better inform and protect the interests of our clients
  • We have to make sure that the way the documents/information are transmitted complies with the legal provisions, so the persons involved in the distribution activity from the brokerage company transmit clear and precise information, drafted in Romanian or in a language agreed by parties, in a way that is understandable
  • In terms of Professional Training, the objective is to maintain an adequate level of performance of the personnel involved in the insurance distribution
  • Conduct - objective: protect the rights of clients/potential clients by managing the risks that may arise in their relationship with them. Distributors behave fairly, honestly and professionally
  • An important aspect is the analysis of customer requirements and needs, consultancy. We need to make sure that the information requested must not go beyond the purpose of processing

President, PRBAR

  • The Supervisory Authority trusts that we will do this in line with IDD and for this we thank, as well as for providing a longer period of time to fully comply with the IDD requirements
  • I would like to address a request to the insurance companies and that because we recently received some additional acts on intermediation contracts, these acts being copy-paste of the legislation. In the same way, we, brokers, can copy-paste to the statutory obligations and transfer them to insurance companies, but we do nothing, but the two parties comply with the law. As a result, I do not see this approach, of signing an additional act in which we subscribe provisions from the law, to be useful, not least concrete, only formal. So, I call on insurance companies to find a way and not to repeat the same system like GDPR compliance, to have discussions before we can set some measures that may be useless

VicePresident, Global - Strategic, BROADSPIRE

  • We are paying annual damages of over USD 14 billion
  • WeGoLook is the Uber of damage activities. There are those viewers, independent service firms, who, for example, go to take a picture in case of an accident, pass the picture through the application and go to those who need to adjust the information
  • If we can not send people for photos and you have an accident or have a person who can take the picture and send you the information, then you can use it through the YouGoLook application without costing anything in addition to the claim file
  • What do those who work for these applications do? They deal with risk management, data gathering for claim files, they can also check construction projects, repair processes, if there are claims for damages from floods
  • We can allocate financial resources to Central and Eastern Europe. This region is not well integrated with the rest of Europe, so we want to be more active in this area, so that we can introduce a European component on our side
  • I understand that the activity in Romania is mainly composed of the car damage files, but also home insurance
  • We have made a 20% reduction in the frequency of claims for the customer


EU & International Affairs, VVO - Austrian Insurance Association

  • Transparency in remuneration is the biggeste change. Price is a competitive element for all contracts
  • From insurer's perspective, the volume of documents brings a big impact. I think brokers will consider it the same. This is the main impact
  • Clients are interested in the price they are paying. It's good to know they pay for counseling, which is important
  • Counseling is important, but we also have simple products with no need for counseling

Director Regulation - Authorization Direction, ASF

  • I think transparency is one of the most important aspects of IDD. For Romania, there are other important issues, being a MTPL-based market
  • More and more brokers believe it is an opportunity for them to diversify their portfolio to other clients. I think we have to move away from just selling to corporate
  • I think consumers are not very interested in how much the intermediaries receive from the price they pay. Customers are interested in acquiring the right product for them, to have the product according to their needs. At this time, intermediaries are required to inform what commission they receive. I think that, in a few years, intermediaries will discipline themselves without the intervention of the authorities
  • It is too early to quantify the impact of IDD. I think it's very hard to estimate if and how many intermediaries will disappear. In the long run, only companies that comply will survive
  • Consumers often follow the advice of intermediaries

Re/Insurance Expert

  • Does the client want to know how much money the intermediary makes? It's an interesting question. Perhaps, when you buy a pair of jeans, you do not think about the amount that remains to the seller
  • Years ago, many sold insurance as an additional project, rounding up their income from insurance sales. The professionals were 265,000 and now there are 190,000 registered
  • MTPL has nothing special and it doesn't need counseling

Prof. Karel Van HULLE,
Catholic University Leuven, Belgium and Goethe University, Frankfurt

  • When discussing about the fee charged by intermediaries, there were two important negotiating points. Member States said they had to eliminate the commission because the intermediaries did not offer advice. In some countries, intermediary fees are currently prohibited
  • In 2020, the Commission will evaluate the impact of IDD on small companies
  • IDD-ul wanted to bring more professionalism
  • Most people do not know that there is a link between risk and insurance premium. They don't know that, if the risk is high, the price is also high

Interactive panel - IDD

Viorel VASILE,

  • A positive thing about IDD is that we manage to enter the client's yard. In order to be able to enter his home, we can sell him an insurance policy, we must have the ability to make him answer our questions and make him aware of his needs
  • I appreciate the role IDD gives us. Apreciez rolul pe care ni-l da IDD. We must provide our client with counseling. If he does not want, we will not offer, but, if he wants, our role is to enter his house
  • It's important to turn our eyes to the consumer. If you ask him to sign 7 documents, he runs away. A customer can not sign more than 2 documents. The client is bothered by the large number of papers he has to sign. The customer must be satisfied

Dorel DUTA,
President, UNSICAR

  • I am pleased to note that what we have done so far is that the market is close to IDD. We were already doing many of those things, now they must be adapted to reality. And, of course, there are some issues that will get us tangled, we are also debating some legislative provisions
  • A negative aspect would be the implementation deadline, which is never enough, but efforts are being made and we try to adapt the legislative provisions in our activity and to have satisfied customers

President, PRBAR

  • There is nothing new in IDD. I have been doing this job for over 25 years and I have applied the flow of information that is provided in IDD and requested information from the client. What actually IDD brings now is just a standardization of these processes and that is a positive thing, in the sense that all brokers have to do the same
  • Another positive aspect is that, when implementing IDD, there is an extraordinarily good collaboration between ASF, brokers and insurers. The whole market is working together to implement IDD for the benefit of the consumer, but we must keep in mind that in Romania the consumer is not well educated
  • A negative aspect: the compliance period, but as we have adapted in the past, we will also adapt now. Many brokers will comply until the end of the year

Cristian FUGACIU,
CEO, MARSH Romania

  • What has happened so far, the fact that we provide consultancy to our clients, is formalizing and there is a standardization of the activity that brokers do and the services they offer. IDD helps us to better define our internal processes and procedures
  • A negative impact could be the fact that, in some cases, distribution would become hard and costly and the effect would be decreasing sales
  • At this moment of implementation, we see that much of our work is directed more towards the formal area of internal organization. So, less time to discuss and meet with the clients and offer them more consultancy and more time allocated internally for implementation
  • IDD is a step forward in professionalizing and regulating the market. The goal is clear - consumer protection -, but let's not exaggerate

Member of the Board, OMNIASIG

  • Among the positive aspects I felt was the fact that the brokerage industry got more open to receiving change and I also saw a greater openness from the ASF
  • I consider we have to think beyond formalities. What makes an agent or a broker intermediary to offer or not consultancy to the clients? There are two big answers: money and knowledge
  • I am optimistic that we will go through this panic period


  • I think it will take at least a year (to see the effects of IDD). IDD is impacting the business model
  • It's easy to make legislation, it's important that it also takes into account the realities of the market
  • There are many aspects to consider and I think most importantly is that, by common agreement, we have determined that we need to change something and that we need to have some patience, even if some things impact our activity. It takes time to adapt
  • Customer is zero priority. If the customer is satisfied, everyone in the business is satisfied
  • The Authority is opened to dialogue and we want to simplify the secondary legislation as far as possible

Head of Regulation Office, ASF

  • My wish is that the market respects the principles. We have a good law on IDD because we have fought with all the weapons to keep it at the level of principles, policies and procedures that the market can develop
  • The fewer regulations, the better for everyone. The role of the Authority is not to enter insurers or brokers' garden, in the way they run their businesses day by day. It still happens, but less and less
  • I think companies are the most prepared (to adapt to IDD) because they already have exercised with Solvency II
  • More attention to the consumer and fewer regulations

Share |