Insurance Europe has called on EU policymakers to deliver a meaningful simplification of financial services regulation, warning that excessive complexity is undermining the sector’s ability to support economic growth and resilience.

In a recent statement, the federation stressed that the planned Financial Services Omnibus package should go beyond limited adjustments and instead provide a genuine reduction of regulatory burden across the insurance value chain.

According to Insurance Europe, the current framework - while aimed at ensuring stability and consumer protection - has become increasingly complex, generating significant compliance costs and operational challenges for insurers. This, in turn, may limit the industry’s capacity to invest, innovate and contribute to key EU priorities, including the green and digital transitions.

The federation is urging EU leaders to ensure that simplification efforts are coherent, targeted and impactful, avoiding additional layers of rules or fragmented revisions. A more streamlined regulatory environment, it argues, would enhance competitiveness while maintaining high standards of policyholder protection.

Insurance Europe also highlighted the importance of proportionality, calling for rules that better reflect the size, nature and risk profile of different market players. This is seen as particularly relevant for smaller insurers, which are disproportionately affected by regulatory complexity.

In addition, the industry is advocating for improved consistency across legislative initiatives, noting that overlapping requirements from multiple EU frameworks can create inefficiencies and unintended consequences.

Overall, insurers emphasize that a well-designed simplification package would not weaken supervision, but rather strengthen the effectiveness of regulation, enabling the sector to better support households, businesses and long-term investment across Europe.

Click here to download the paper.