Keeping up with the market – June 2022

Every month we help you keep up with the Belgian and Luxembourg insurance market.

Buy-outs

TVM Belgium & VDVision

TVM Belgium, the transport and logistics insurer has taken over the mobility academy VDVision and renamed it TVM Solutions. This enables the company to profile itself as both an insurer and a training partner for the entire transport and logistics sector.

TVM Belgium has already been working with VDVision for several years on multiple trainings, including the highly appreciated TVM training on maneuvers and blind spots.

Kurt Vandevelde, CEO of VDVision (on the left) and Jan van Waterschoot, commercial director of TVM Belgium (on the right)

Besides the insurance part, which remains our core business, we want to offer additional services that bring added value to our customers. They can come to us for a total experience, based on the one-stop-shop principle. We don’t just profile ourselves as an insurer, but rather as an expert partner. Of course, there has to be a synergy between the insurance activities and the additional services.” says Jan van Waterschoot, commercial director of TVM Belgium (on the right in the picture).

He added: “The intention is to further increase the number of training courses and workshops in the future, but also to focus on e-learning and microlearning. We also plan to expand the portfolio to include specific audits and coaching programs for both customers and drivers.” In the near future, customers will be able to access the entire portfolio via a new online platform.

 

Foyer & Allianz Luxembourg

    

Insurer Foyer has acquired Allianz Luxembourg’s insurance portfolio.

Both companies signed an agreement to transfer the insurance portfolios managed by Allianz Insurance Luxembourg and Allianz Life Luxembourg to the Foyer Group. The transaction is subject to approval by Luxembourg’s official insurance supervisory body (CAA) and the National Bank of Belgium.

Regarding this operation, Foyer and Allianz Luxembourg stated that this operation will create synergies between the two groups in their non-life and life insurance segments in Luxembourg.

Indeed, Foyer strengthens its position in the local insurance market while Allianz refocuses its strategy on the international life insurance business. “With the transfer of its activities to the local market, Allianz Luxembourg strengthens its position as a European hub of wealth management expertise,” said Eric Winter, CEO of Allianz Life Luxembourg and Managing Director of Allianz Insurance Luxembourg. “Thanks to the expertise of our group, we are able to offer tailor-made, long-term solutions to our HNWI and UHNWI clients on a fee-for-service basis.”

 

Products

FSMA

To detect closet indexing, the Financial Services and Markets Authority (FSMA) has created a new tool based on data analysis. This still unknown fraudulent practice consists in lying about the investment funds offered to investors.

Indeed, fund managers deceive their clients by disguising the financial products they offer them. The FSMA tool will help detecting those unscrupulous financial players who sell “Pinocchio funds” as active funds, where individualized investment decisions are made by the fund manager. However, these investment funds are automated and linked to an existing index. The promise of active management is false: they are actually passive funds. Since active funds are generally more expensive than passive funds, this is deception.

The concern first arose at the European level, notably in Norway. The FSMA uses this EU tool but wanted to go further and develop its own system. “FSMA has always been a laboratory in Europe. We are pioneers“, says Chairman Jean-Paul Servais.

In order to be more in line with Belgian practice, the FSMA analyses not only SICAVs, like the European tool, but also mixed funds. The latter cover 42% of the market in Belgium.

 

AXA

AXA Group has launched its Digital Commercial Platform, enhancing the real-time collection by satellites, drones and sensors of data and analysis. The aim is to build an ecosystem of new services to meet the evolving protection needs of the companies.

Within the platform, AXA integrated two of its initial programs: AXA Smart Services and AXA Climate.

AXA Smart Services is a network that provides risk information, risk management capabilities among other services to help the internal and external clients.  One of its advantage is the ability for the clients to monitor in real time all their assets and to have access to tailored prevention and valued-added services.

AXA Climate is an open science and data-driven ecosystem  providing a range of sustainability services and training, consulting, insurance and financing for large corporations but also public and financial institutions.

 

News of the market

FSMA

The FSMA has published its 2021 Annual Report (available in French or Dutch). Its core mission is to contribute to the fair treatment of financial consumers and to ensure the transparency of financial markets. To do so, this authority monitors the correct application of the MiFID’s rules of conduct which focus on consumer protection.

Over the past ten years, there has been a positive development in compliance with these rules, but there are still diverse elements to improve such as the way products are designed, particularly in terms of fees and potential returns.

Regarding MiFID’s rules, AXA Bank Belgium and the FSMA have recently agreed on an out-of-court settlement in the context of MiFID I supervision back in 2017. The settlements amount to 500,000€ but this decision will not impact AXA Bank Belgium’s customers.

It was found that the questionnaire used by AXA Bank Belgium to test the knowledge and experience of customers did not address several important investment risks and did not distinguish between certain categories of investment products. In addition, shortcomings were found in the assessment of customer experience and suitability of transactions, as well as in the internal controls over the system and data retention.

To adjusts the pointed shortcomings, the company invested heavily in its investment services. Today, the FSMA officially confirmed on its website that all findings from the inspection have been corrected: “In the meantime, AXA Bank Belgium has adjusted and strengthened, as part of an action plan, its arrangements, systems, and procedures related to the adequacy of the service provided, internal control, data retention and product governance.

 

Insurance Europe

Insurance Europe, the European Federation of Insurers, has published its 2021-2022 Annual Report, outlining the European insurance industry’s positions on key insurance-related issues. Here is a little overview of the topics discussed: progress on sustainability and inclusion, the Solvency II review, the EU strategy for private investors, and the use of artificial intelligence.

Andreas Brandstetter, President of Insurance Europe wrote: ” It is difficult to express the extent of our disbelief and anger over the dreadful events that have unfolded in Ukraine. We had hoped to never again see such violence on European soil, and the war will have significant consequences that will be felt throughout our continent for many years to come. During such difficult moments, coming together to try to find common solutions to challenges is key. We share the sentiment expressed by Don Forgeron, president of the Global Federation of Insurance Associations (GFIA), when he says that one thing that is heartening when we look at the many grave challenges facing the world today is that federations such as Insurance Europe and GFIA have members and staff with the ambition and ability to find innovative ways to tackle them.”

You can read the full annual report here.

 

AG Insurance

With over 600 contributors, AG Insurance’s IT department has just delivered the largest project in the company’s history: the IT infrastructure transformation. Indeed, more than 80 million lines of code migrated to an infrastructure that supports 14 million transactions per day. For a few weeks now, all of its business applications have been running on a network of distributed Windows servers. AG thus no longer resorts to the mainframe, a technology born in the 1960s.

This new IT infrastructure enables the company to meet the expectations of its customers and of a market, constantly evolving towards more digitalization.

 

Assuralia

Almost a year after the dramatic floods of July 14-16, 2021, nearly 90% of the claimants have been compensated according to Assuralia’s report.

As for the 10% of remaining files, an agreement on all the damaged items has not yet been reached, but the amounts on which the insurer and the insured have agreed have already been paid.

The extent of the damage caused by last summer’s floods was such that the return to normal is hard to reach,  particularly in cases involving significant damage over 50,000 €. These cases require several expert appraisals and more important repair works.

Given the current climate challenges, Assuralia wants a public-private partnership to maintain the insurability of natural disasters.

The insurance sector wishes to continue to play its societal role of protecting citizens and companies while ensuring the continuity of economic activities.

 “The damage caused by the floods in July 2021 and the successive storms in February 2022 are evidence of the emergence of risks that are now considered systemic. In order to maintain affordable premiums and ensure full compensation during such weather events, it is imperative to provide sustainable solutions through the establishment of a more adequate public-private partnership. Without such a partnership, full compensation for future large-scale natural disasters may be at risk,” says Hilde Vernaillen, President of Assuralia.

With the help of new technologies and innovation, insurers can increasingly refine their data and play an important role – in conjunction with the authorities – to better map risk areas, warn citizens of potential disasters and better guide clients in taking preventive measures,” emphasizes Etienne Bouas-Laurent, Vice President of Assuralia.

 

Insurance companies & Russia

Following the war in Ukraine, several insurance offices in 47 different countries decided to put an end to their agreements with Russia and Belarus. A European rule stipulates that when one-third of the bureaus in the European Economic Area states decide to terminate an agreement, the others have to follow through as well.

Now, the Belgian Office has also terminated these bilateral agreements with both Russia and Belarus.

The notice period of twelve months started on June 1, 2022. This means that the insurer of a Belgian motor vehicle will no longer be able to cover the territories of these two countries as from June 1, 2023 (the effective date of the termination).

 

 

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