Insurance regulation newsletter - Issue 7

Digitalisation, climate change and the cost of insurance have dominated agendas in early 2024 for insurers and regulators alike. While macroeconomic conditions have stabilised, technological advancements and legislative developments promise to keep insurers busy into the summer months and beyond.

The Mazars Insurance Regulation Newsletter provides a flavour of the latest developments that insurers and reinsurers should be aware of.

2024 has already seen some significant developments on the domestic insurance front. The Supreme Court’s much awaited ruling on the constitutionality of the Personal Injury Guidelines generated plenty of headlines, as did the latest update of the Central Bank of Ireland’s (‘CBI’) National Claims Information Database. All this comes as the CBI launch its consultation to review the Consumer Protection Code, release their findings on a thematic review into motor insurance conduct practices and grant approval for a significant new player to enter the domestic home and motor market.

Spring is often a time for setting priorities for the year ahead. Both the CBI and the European Insurance and Occupational Pensions Authority (‘EIOPA’) have set out regulatory and supervisory priorities with macroeconomic risks, underwriting governance, value-for-money and outsourcing continuing to feature prominently.

Integration of climate change into business-as-usual risk management also remains a critical goal for both regulators. EIOPA have proposed changes to the calibration of capital requirements which could prove significant for Irish flood risk (re)insurers. EIOPA also continues to highlight natural catastrophe under-insurance concerns and remain committed to narrowing that protection gap. At a domestic level, the cross-sector Climate Risk and Sustainable Finance Forum has been active, with the capacity building and risk management working groups publishing update reports.

On a European front, the AI Act continues to move through the legislative process with only formalities now standing between the draft text and the Act’s entry into force. Meanwhile, EIOPA have published an informative series of studies on internal model practices and released details of its 2024 European-wide stress test which shall focus on geopolitical tension risks.

With demands on multiple fronts, we have noted that the shortage of specialist skills and resources continues to be a prominent issue for Irish undertakings – a challenge that seems unlikely to alleviate in the months ahead. Nevertheless, most insurers remain optimistic of overcoming these barriers and capitalising on opportunities available in the market, both domestically and across borders.

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Insurance-Regulation-Newsletter Q1 2024