Insurance Europe appreciates the opportunity to provide their comments on the draft and they support the proposal, especially:
- The proposed timeline - ie application in 2022 with full reporting in 2023 - will help allow financial market participants (FMPs) time to implement the necessary IT, data, validation and management processes.
- The alignment with the investment disclosures for asset managers and insurers, as they improve the consistency and comparability of the KPI across FMPs.
- Sovereign exposures are excluded from the main indicator because they are not (yet) covered by the Taxonomy. The plan to include these in the Taxonomy by 2025 is welcome, as these assets are extremely relevant for insurers.
- Additional complementary disclosures will be used to provide more detail, including information on assets currently not covered by the Taxonomy and therefore not included in the main KPI.
- The KPI numerator for underwriting activities, based on premiums, can be assessed at product level, although do no significant harm principles (DNSH) will still require customer level assessment, which is why this is unavoidable.
With respect to the KPI for investment activities:
- The denominator of the main investment KPI should be based only on Taxonomy-eligible investments where the insurer controls the investment decision. This means the following investments should be excluded from the nominator and denominator of the main indicator:
- Investments where the policyholder makes the choice of where to invest. These should be reported separately as a secondary KPI.
- Exposures to undertakings not reporting under the CSDR.
- Derivatives, as they are not connected to an economic activity under the Taxonomy.
With respect to the KPI for underwriting activities:
- The denominator should only capture activities that are eligible under the Taxonomy.
- The wording "not environmentally sustainable" used in the template (A2) and the columns about the DNSH criteria should be deleted to achieve more efficient and meaningful disclosures.