3rd Forum of Insurance Intermediaries
Bratislava, 8 October 2007
Report on the business insurance
sector inquiry
By Manuel Vila,
BIPAR Chairman
BIPAR
European Federation of Insurance Intermediaries
 Headquartered in Brussels since 1989
 47 national associations in 30 countries
 100,000 insurance intermediaries
 Represents interests of intermediaries with European
institutions
 Recognised voice of the profession at EU level
World Federation of Insurance Intermediaries
 Set up in Washington in 1999
 Members: North + Latin America, Asia, Africa, Europe
(80 national associations)
 Promotes profession with international bodies such as:
UN/World Bank/ IMF , OECD, IAIS, WTO, …
 BIPAR runs Secretariat in Brussels
DG Competition’s sector enquiry into
business insurance
 Started in June 2005
 Aim: detection of any restrictive practices and competition
problems
 Insurance intermediation part of the enquiry
 Interim report on 24 January 2007
 Public hearing on 9 February 2007
 BIPAR submission on 10 April
 Final report on 25 September 2007
DG Competition’s final report
deals with:
 Financial aspects of the industry (profitability)
 Harmonization of terms and conditions in coinsurance &
reinsurance market
 Distribution of business insurance
 Horizontal cooperation amongst insurers
 Duration of business insurance contracts
Characteristics of intermediation market
Intermediaries make markets more competitive:
 They identify clients’ risks
 They help understand complexities of insurance market
and reduce search costs
 They help companies to reach potential clients
 They help companies with the client’s risk profile
Characteristics of intermediation market
 Reputation = important business asset
 Intermediaries contribute to their clients’ competitiveness
 Many intermediaries provide cover but also risk advice and risk
management consultancy services
 Distribution channels of personal & commercial lines vary in the EU
 In most Member States, intermediaries represent +/- 60% of total
business & personal non-life market
 Few intermediaries serve multinationals
 Intermediaries design innovative solutions to risks
 Competition is fierce (SMEs face increasing competition from banks
& insurance companies)
 The correct implementation of IMD will enable intermediaries to be
more efficient
Findings of final report
► Intermediation:
DG Competition concerned that clients receive all
relevant information to make an informed decision.
More transparency would help in mitigating potential
or perceived conflicts of interest (SME market).
BIPAR’s initial reaction

BIPAR supports transparency of relevant information. To help build
trust there are numerous approaches firms use in communicating
with clients.

The IMD (especially information requirements) is important here but
due to late transposition of the IMD in national regulation, the
findings do not reflect IMD full effects.

The daily intense competition between intermediaries mitigates in
practice the potential conflicts of interest. BIPAR regrets that the
report does not address this point and other market dynamics in
more detail.
 The Commission intends to look at these issues in the framework of the
review of the IMD and also invites industry participants to review the
findings and propose appropriate action.
Final report
 The report refers to IMD evaluation and to self-assessment by
the industry
 BIPAR agrees with this approach and believes that:
- Clients and intermediaries must discuss remuneration aspect
- Delegated authorities: transparency = solution to mitigate
potential conflict of interest
- Information requirements of IMD lay down precise rules on
disclosure and advice to be given
- Intermediaries in competition with alternative forms of
distribution
Conclusion
Questions and answers
3rd Forum of Insurance Intermediaries
Bratislava, 8 October 2007
Report on the business insurance
sector inquiry
By Manuel Vila,
BIPAR Chairman