A pan-European pension markets product would help spur more cross-border economic activity and instill confidence in the single market amongst consumers, said Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority (EIOPA) to EurActiv.
In his view, the internal market for insurance is still insufficiently integrated, whereas a true single market – including insurance - is one of the fundamental foundations of Europe. European insurance market is growing, there are already almost one-hundred cross-border groups under EIOPA’s supervision but the small national insurance companies – providing services to nationals or to local target groups – have an important role as well and bigger national companies are often European champions. Facts show that European insurers are far more international than players in the banking sector. In addition, large European insurers are far more international than their American and Asian counterparts: five out of the nine global systemically important insurers are from Europe.
In order to make the market more cross-border, the chairman emphasised the need for a strong and integrated European supervision reflecting the increasing integration of financial markets in Europe. The latter is especially important in order to overcome the consumers’ loss of trust in financial markets and consequently in supervision of financial services.
The expert underlined the two most important steps to be taken: a single rule book - combined with consistent supervision - and the same high level of consumer protection across all European jurisdictions is a precondition for a flourishing and integrated single market. To achieve this, EIOPA aims to warrant that undertakings are soundly managed, have the money to fulfil their commitments and that the right contracts are sold to the right people by ensuring better transparency for consumers, reinforced fairness in selling practices and product governance and suitability.
Gabriel Bernardino said that: “a great opportunity to further develop the European insurance market will be the introduction of a truly European personal pension product” as in case of personal pensions, the market is still fragmented with great diversity in the regulatory framework and no European approach at all. Therefore, there is a need for a strong and quality pension product that can be trusted and can be sold throughout the EU to citizens of all kinds. Such product could help decreasing costs, delivering simpler products with transparent fee structures and avoiding conflicts of interest in selling practices.
“The EU economy could benefit from such personal pensions becoming another main driver for sustainable long term investments, contributing to the Capital Markets Union, needed for speeding up economic growth and the creation of jobs, the main goals of the European Commission” said Mr. Bernardino.