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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 enable 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 various trainings, including the highly appreciated TVM training on maneuvers and blind spots.

“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 compagnies.

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. It’s core mission is to contribute to the fair treatment of the financial consumer and to ensure the transparency of the 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 amounts 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 in 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 an 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 it 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 departments 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 resort 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 damage 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 do 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).

 

 

Sources:

Keep up with the market – May 2022

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

Mergers & Buy-out

Ageas & Ageas Federal Life Insurance Company Ltd

Ageas is strengthening its position in the Indian life insurance joint venture Ageas Federal Life Insurance Company Ltd. The insurance group is buying the 25% stake held by IDBI Bank for some 69 million euros. Thus, Ageas now owns 74% of the shares. Regarding other shareholders,  IDBI is  withdrawing but remains a distribution partner. For its part, Federal Bank, retains a 26% stake.

Ageas had already strengthened its position in this joint venture in December 2000. At that time, the group increased its stake from 26 to 49%.

In a press release, it is stated that “This investment is in line with Ageas’ strategy, which aims to expand in regions where it is already present as well as in promising markets with low insurance penetration rates and high growth potential, such as the Indian life insurance market,”.

The current transaction remains subject to regulatory approval. It is expected to be completed in the second half of the year.

 

Ageas & Lusiadas

According to O Jornal Economico, a Portuguese business newspaper, Ageas is one of the four remaining candidates to take over Portuguese hospital group Lusiadas. Apparently, Lusiadas’ worth amounts to 200 millions euros.

 Lusiadas is a leading group in Portugal with six hospitals, including in central Lisbon and Porto. The company owns five smaller clinics as well. The Lisbon hospital is considered the group’s flagship hospital, which employs more than 7,000 healthcare workers.

 

AG – Ackermans & van Haaren – Anima

 

AG and Ackermans & van Haaren (91.8%) and the management of Anima (8.2%) have reached an agreement on the sale of 100% of the shares of Anima, a Belgian group active in quality care for the elderly.

Still subject to the approval of the Belgian competition authorities, the transaction should be completed in the third quarter of 2022.

Anima (formerly Anima Care) was founded in 2007 and has grown into a network of 24 nursing homes covering Flanders, Brussels and Wallonia.

In this transaction, AG will entrust the day-to-day management of Anima to its subsidiary AG Real Estate, the real estate advisor of AG and Ageas, which has been an active investor in elderly care for many years, both in Belgium and abroad (Germany, the Netherlands and Spain).

 

Products and Technology 

 

Wikitree

The Brussels-based company Wikitree has developed WIS, an AI tool (artificial intelligence) able to compare all competing insurance companies’ offerings. It allows its users to find the best formula and facilitate the understanding of the general conditions of insurance contracts. Obviously, the brokers love it and the insurtech won last month the “leader “ label during the Vivium Digital Awards’s jury we mentioned in our previous newsletter.

The digital tool has ingested about 100,000 pages of legals texts and is able to detect the various clauses, exceptions and other exclusions. To simplify the view of the contracts, WIS classifies them by categories in the form of a comparative table.

According to Philippe Afendulis, Wikitree’s CEO, the company “now covers 85% of the non-life insurance market”. He added “We started with the contracts of major insurance companies. We are currently refining with niche companies.” The next challenge for next year will be the integration of insurance contracts.

Adopted by the FSMA, the insurtech not only targets brokers but also insurance companies who use the tool for benchmarking purposes. WIS has already convinced 150 customers as is currently highly requested. Given the enthusiasm around the new solution, Wikitree expects to reach 400 customers by the end of the year.

 

Munich Re

Munich Re has set up a new validation tool to allow a more responsible use of artificial intelligence (AI)-based solutions. This new solution is CertAI and it is available via the start-up CertX, in which the German reinsurer has held a stake since 2021.

Based on six key factors, the new system evaluates AI solutions: fairness, autonomy and control, transparency, robustness, functional and cybersecurity, and data protection.

Commenting on this evolution, member of the Board of Management Torsten Jeworrek said “Munich Re started investing in the build-up of relevant know-how early on and is unlocking new digital fields of business for the benefit of its clients on an ongoing basis. CertAI will enable us to take the next step forward and reinforce our position as a reliable industry partner for the digital world.”

 

News of the market

 

Ethias

To reduce its carbon footprint and meet its employees ‘expectations in terms of flexibility, Ethias has decided to close its national offices (Liege and Hasselt) every Monday.  In this context, the company allows homeworking up to three days a week, i.e. 60% of the working time.

This innovative measure on the Belgian market comes on top of the numerous initiatives deployed over the past few years, which have enabled Ethias to reduce its carbon footprint by one third, four years ahead of schedule.

In 2019, Ethias launched its Change Over plan to become carbon neutral by 2030 with an intermediate target of -30% by 2025. Thanks to the efforts deployed over the last years, the 2025 target has been reached as early as 2021, four years ahead of schedule.

 

Assuralia

logo of Assuralia

Assuralia, the trade association for insurance companies active on the Belgian market, proudly announced its adhesion to the United Nations Principles for Sustainable Insurance (PSI) thereby reinforcing social and environmental commitment. This is the biggest collaborative initiative between the United Nations and the insurance industry.

It’s not the first time that Assuralia takes measures to improve its sustainability efforts. Among them, there is fore instance the appointment of a Sustainability Manager within Assuralia, sustainability training for various functions within Belgian insurance companies, and among other initiatives, the establishment of a permanent working group on sustainability within Assuralia.

 

Alan

logo of Alan

The French scale-up Alan, known for its 100% digital health insurance offering is increasingly growing as a health partner for companies. In order to support its hypergrowth, the company has just raised 183 million euros in funding at a valuation of 2.7 billion euros.

Since the end 2020, Alan has been present in Belgium, making our country a priority market. Co-founder and CEO of Alan, Jean-Charles Samuelian-Werve, who recently moved to Brussels said that “Belgium is growing faster than France and Spain today .The difference we bring to the table compared to the historical players was quickly understood. We can become the market leader,”

Alan clearly stands out thanks to its 100% digital approach to health insurance for companies and their employees and its successful application which is user-friendly and allows to make all type of actions: reimbursements, consultation, chat with a medical team, personalized health content. Another specificity is the offering of a sort of virtual clinic with doctors that its members can contact at any time.

In Belgium, Alan already holds 14,000 members in Belgium with companies such as Sodexo, IBA or Mithra. The gap between Alan’s current 14,000 members in Belgium and the 500,000 that the company is aiming for within 3 years in our country seems enormous, but with 183 million, the scale-up is giving itself the means to achieve its ambitions.

 

Sources:

Keeping up with the market – April 2022

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

Mergers & Buy-out

 

AGEAS  & AFLIC

Ageas has increased its stake in Indian insurer Ageas Federal Life Insurance Company (AFLIC) from 49% to 74%. As a result, Ageas has taken control  by acquiring a majority stake. With 26%, Federal Bank is the only other shareholder.

In India, Ageas’ activities include both life and non-life insurance.

 

AXA & BANCO BPM

 

AXA SA intends to buy a controlling stake in Italy’s third largest bank Banco BPM’s insurance units. Apparently, the discussion has started between the two parties and buying the majority stake would cost around €1.5 billion.

According to some anonymous source, AXA is waiting for Banco BPM to take full ownership of several insurance businesses. They also said that another element to take into account is the fact that Credit Agricole SA recently bought a stake in Banco BPM, which could discourage potential competitors. So far, no representatives for the 3 companies respectively accepted to make a comment.

 

Partnership and Products

 

NN & RECORD CREDITS

  

Life insurer NN and the Belgian broker Record Credits have been working together since 2011. This month, both parties announced they are extending their partnership for another five years.

This alliance allows NN to keep on relying on its network of 650 independent credit brokers for the distribution of its outstanding balance insurance policies. For its part, Record Credits can offer more attractive rates on home loans to its clients when they opt for this type of insurance policy.

 

MUNICHE RE & ONEDEGREE

 

Reinsurer Munich Re decided to partner with OneDegree, a Hong Kong-based insurtech, to insure NFTs and develop offerings that cover digital assets.

The explosion of the crypto phenomenon led to a three-year partnership between the two companies, coming up with a groundbreaking solution: OneInfinity. It is designed for digital trading platforms, custodians, asset managers and technology providers.

As part of the deal, Munich Re will provide reinsurance capacity and technical underwriting support for OneDegree and the latter will become the first licensed insurer in Asia to collaborate with a world-class reinsurer offering this type of coverage.

 

ALLIANZ

Allianz launches Allianz MeHomeLoans, a new mortgage loan in Belgium. These loans are financed by the challenger bank MeDirect, one of Allianz’s partners. This innovative product will have a flexible configuration combined with a transparent price, which quickly adapts to market demand and creates new opportunities for people who want to acquire a home.

Tim Rooney, CEO of MeDirect, the bank behind MeHomeLoans, declared “We are excited to collaborate with Allianz and offer our innovative products to Allianz’s extensive network of mortgage and insurance brokers.” For Allianz, Kathleen Van den Eynde, CEO of Allianz Belgium, declared “Through this unique offering, we intend to strengthen our position as a lender in the Belgian mortgage market. The modern technology and scalability of the Allianz MeHomeLoans joint proposal is perfectly in line with our strategy to support the broker network in digital customer services.

This new offering entered the Belgian mortgage market in the first quarter of 2022 through Allianz’s network of independent brokers.

 

SWITCH

The store chain Switch (Apple) will no longer sell insurance for digital equipment.

This is due to FSMA’s decision on 2 March 2022 to prohibit Switch Holding NV from marketing those insurance products on Belgian territory. In various sales outlets, inspectors observed the non-compliance with certain legal or regulatory provisions, particularly regarding customer information and rules of conduct.

Therefore, the FSMA has taken note of Switch Holding SA’s renunciation of its registration in the register of insurance intermediaries, with effect from 25 March 2022.

 

WTW

Willis Towers Watson (WTW) has just released an update of its pricing tool, the Radar software. Open-source software Python has been fully integrated to the new version: Radar 4.14. Thanks to this upgrade, it will be easier for insurers who will have access to a sophisticated environment combining advanced pricing capabilities with the powerful Python.

Indeed, working practices among insurers have substantially changed with the sanitary crisis. Consequently, analytical methods intensified, as well as the need to adjust quickly to market shocks and processes automation. In addition, the pressure on insurers to include governance and security controls in their pricing capabilities has also increased.

According to Serhat Guven, Managing Director at WTW, “Radar technology has always led the market in its ability to develop and deploy complex rating algorithms with ease and at speed, supported by a transparent and sophisticated governance capability.”

 

News of the market

 

VIVIUM DIGITAL AWARDS

The winners of the Vivium Digital Awards 2022

This year was the third Vivium Digital Awards ceremony. The Vivium Digital Awards jury awarded 6 Belgian insurtechs with the ‘leader’ label. This means that they are at the top of their field, according to the Vivium Digital Awards jury.

In the field of ‘life insurance’, Harmoney, Harukey and myFaro were awarded. For the ‘non-life insurance’, WeGroup, with its virtual office assistant Louise, and the WIS tool received an award.

As for the ‘customer interaction’ category, Penbox also won the ‘leader’ label .The company was also chosen by brokers as the largest gamechanger of 2022 and received also the Broker Award.

 

BeNeverMede FUND: ASSURE YOUR FUTURE

  

For the 5th time, the Benevermedex Fund, ‘Assure Yor Future‘, will grant a prize of 3,500 euros in collaboration with the King Roi Baudouin Foundation. The award will be attributed to an original scientific work on the prevention of human damage in the field of private insurance that resulted in the successful defense of a thesis at a university in the Dutch Region during the period from 1 October 2021 to 30 September 2022.

Established in 2017, the Benevermedex Fund was created  within the Dutch-speaking Belgian Association of Insurance Consultants and Medical Experts to improve the prevention, assessment, compensation and quality of life of the many accident victims through support for scientific research. It is managed by the King Baudouin Foundation with the financial support of Assuralia.

You can read more about the project submission on the following website: www.benevermedex.be

 

SOLIDARIZED PENSION FUND

Belgium established the “Solidarized Pension Fund”* on 1 January 2012 to provide sustainable funding for the pensions of affiliated local government employees who are appointed permanently. At the time, the Solidarized Fund grouped together several pension financing formulas (Pool 1, Pool 2, Pool 3, police zones, etc.).

In 2021, the Court of Auditors** denounced the fact that, in this view, the pension burden was increasing too fast in relation to the contributions paid by the affiliated local authorities. In response, the Minister declared that a reform was underway.

Some of these measures have already been adopted but others are still being processed. Here is a listing of the adopted measures:

  • the basic pension contribution rate has been raised to 44% for the year 2023 (from 43% for the year 2023)
  • the Pool 1 Reserve Fund will contribute to the pension costs of local authorities formerly affiliated to Pool 1 for the year 2023

On 21 April 2022, a new bill was introduced in the House with the aim to reform rules regarding the pension burden borne by the “Solidarized Pension Fund” in the event of the dissolution or disappearance of a local authority (merger, transfer, etc.). This would ensure that the pension burden of the concerned agents would still be financed.

Finally, other measures are expected, especially regarding the strengthening of solidarity within the Solidarized Fund.

*Fond de pension solidarisé/Gesolidariseerd pensioenfonds

**Cours des Comptes /Belgische Rekenhof

 

 

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