- The IDD is playing third fiddle to Brexit and GDPR and yet it deeply changes the insurance distribution landscape in Europe
- Big players may struggle to adapt in time due to the scale of their operations and small carriers risk falling foul of the new requirements because of their limited compliance capabilities
- The insurance industry can use the IDD as a platform to provide assurance in a transparent way
Change continues to be the only constant but the fact that it’s been ever thus doesn’t necessarily make it any easier to manage.
We are living this with Brexit currently as the industry puts in place measures to assuage customer concerns about continuity of service post 2019. Equally, while we can’t say the General Data Protection Regulation came out of the blue, there remains an air of uncertainty about how rigorously its stipulations will be applied and a degree of grey area about what is truly meant by certain aspects of the regulation.
Both of these changes have long-term ramifications for our industry and our customers’ businesses and understandably have galvanised steering groups, implementation committees and new breeds of expert into action across Europe.
What about the Insurance Distribution Directive?
The IDD is the single biggest change to the insurance distribution landscape in Europe since the adoption of the Insurance Mediation Directive in 2002 and yet for many it appears to be playing third fiddle to Brexit and GDPR.
The UK is in a better position to implement the new rules due to the Financial Conduct Authority’s gold-plating of conduct regulation under the IDD but the same cannot be said of the rest of Europe. European markets are largely not ready for the IDD and some of the traditional players may struggle to adapt in time due to the sheer scale of their operations and those smaller carriers, with limited compliance capabilities, also risk falling foul of the new requirements.
The IDD sets out to harmonise regulation across Europe to create a level playing field for intermediaries and insurers to the benefit of customers. Unlike the IMD, which only applied to intermediaries, expectations for its consistent application across all EU territories will be stricter, will apply to insurers and will require insurers to control all of their channels of distribution.
In a world of increasing uncertainty, our customers want stability and assurance. We as an industry are perfectly placed to provide this and can use the IDD as the platform to do so with transparency and clarity.
We talk a lot about disruption in our industry but typically in relation to the likes of Google or Amazon upsetting the applecart. However, change comes in many forms and how we adapt to it is what defines us. The IDD represents a new dawn for customer engagement in Europe, are you ready for it?
Blog first appeared on postonline.co.uk on 17 May 2018.