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EIOPA-BoS-15-233

18 11 2015

EIOPA Fourth Consumer Trends Report

mailto:info@eiopa.europa.euhttps://eiopa.europa.eu/

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Table of Contents

Table of Contents ...............................................................................................1 List of Figures .....................................................................................................4 List of abbreviations ...........................................................................................5 List of National Competent Authorities (NCAs) ...................................................6 Executive summary ............................................................................................8 1. Introduction and scope .............................................................................. 10 2. Insurance sector ........................................................................................ 12 2.1. Key Figures ....................................................................................................... 12 2.1.1. Evolution of the insurance sector ....................................................................... 12 2.1.2. Consumer complaints in the insurance sector ..................................................... 13 2.1.3. Cross-border insurance complaints .................................................................... 15 2.1.4. NCA survey .................................................................................................... 16 2.1.4.1. Top 3 Consumer Issues ................................................................................. 17 2.1.4.2. Thematic Work ............................................................................................ 17 2.1.4.3. Financial Innovation ..................................................................................... 18 2.2. Recurring trends ................................................................................................ 19 2.2.1. Financial advertising and disclosure of contractual and pre-contractual information issues 19 2.2.2. Claims management issues .............................................................................. 21 2.2.3. Unit-linked life insurance products ..................................................................... 23 2.2.4. Cross-selling ................................................................................................... 25 2.2.5. Financial literacy of consumers ......................................................................... 27 2.2.6. New life insurance products with reduced guarantees and switching from life insurance guaranteed policies to policies without guarantees ........................................................... 29 2.2.7. Digitalisation of the insurance sector ................................................................. 31 2.3. Emerging trends in the insurance sector ................................................................ 33 2.3.1. Financial innovation and complexity ................................................................... 33 2.3.2. Increasing customisation of products and segmentation of consumers through consumer analytics and/or Big Data ............................................................................... 34 2.3.3. Training and professional competence standards of insurance intermediaries .......... 37 2.3.4. Management of conflicts of interests .................................................................. 38 3. Pensions sector .......................................................................................... 41 3.1. Key Figures ....................................................................................................... 41 3.1.1. Evolution of the pensions sector ........................................................................ 41 3.1.2. Pension Complaints ......................................................................................... 42 3.1.3. NCA survey .................................................................................................... 44 3.1.3.1. Top 3 Consumer Issues ................................................................................. 44 3.1.3.2. Thematic Work ............................................................................................ 44 3.1.3.3. Financial Innovation ..................................................................................... 45 3.2. Trends in the pensions sector .............................................................................. 46 3.2.1. From Defined Benefit to Defined Contribution ..................................................... 46 3.2.2. Transferability of pension rights ........................................................................ 48 3.2.3. Changes in the decumulation phase ................................................................... 51 3.2.4. Information and transparency issues, including the disclosure of costs and charges . 53 4. Conclusions and EIOPA's activities ............................................................. 56 4.1. Trends in the insurance sector ............................................................................. 56 4.2. Trends in the pension sector ................................................................................ 59 Annex I - Methodology ..................................................................................... 62 Annex II - Pension definitions and scope ......................................................... 65

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List of Figures

FIGURE 1: YEAR-ON-YEAR GROWTH GROSS WRITTEN PREMIUMS LIFE. MEDIAN, INTERQUARTILE RANGE AND 10TH AND 90TH PERCENTILE . 12 FIGURE 2: YEAR-ON-YEAR GROWTH GROSS WRITTEN PREMIUMS NON-LIFE. MEDIAN, INTERQUARTILE RANGE AND 10TH AND 90TH

PERCENTILE .................................................................................................................................................................. 13 FIGURE 3: 2014 INSURANCE COMPLAINTS BY CAUSE OF COMPLAINTS .............................................................................................. 14 FIGURE 4: INSURANCE CROSS-BORDER COMPLAINTS .................................................................................................................... 16 FIGURE 5: NCA SURVEY - TOP 3 CONSUMER ISSUES - INSURANCE................................................................................................... 17 FIGURE 6: NCA SURVEY - THEMATIC WORK - INSURANCE ............................................................................................................. 18 FIGURE 7: NCA SURVEY - FINANCIAL INNOVATION - INSURANCE ..................................................................................................... 19 FIGURE 8: EURO AREA - MONEY MARKET - EURIBOR 1-YEAR ........................................................................................................ 24 FIGURE 9 - EURO AREA 10-YEAR GOVERNMENT BENCHMARK BOND YIELD - YIELD .............................................................................. 29 FIGURE 10: USE OF ONLINE BANKING IN EUROPE ......................................................................................................................... 31 FIGURE 11: REGULATION OR BAN OF COMMISSIONS ..................................................................................................................... 40 FIGURE 12: ACTIVE MEMBERS IN THE OCCUPATIONAL PENSION SECTOR .......................................................................................... 42 FIGURE 13: PENSION COMPLAINTS BY CAUSE .............................................................................................................................. 43 FIGURE 14: NCA SURVEY - TOP 3 CONSUMER ISSUES - PENSIONS .................................................................................................. 44 FIGURE 15: NCA SURVEY - THEMATIC WORK - PENSIONS ............................................................................................................. 45 FIGURE 16: NCA SURVEY - FINANCIAL INNOVATION ..................................................................................................................... 45 FIGURE 17: IORPS AND ARTICLE 4 RING-FENCED FUNDS - ASSETS UNDER MANAGEMENT .................................................................... 46 FIGURE 18: INCREASE IN THE NUMBER OF MOBILE EU WORKERS ..................................................................................................... 49 FIGURE 19: PAY OUT OPTIONS HIGH LEVEL OVERVIEW ................................................................................................................ 51

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List of abbreviations

ADR Alternative Dispute Resolution

AM Active Members

DB Defined Benefit

DC Defined Contribution

EBA European Banking Authority

EEA European Economic Area

EIOPA European Insurance and Occupational Pensions Authority

ESMA European Securities and Markets Authority

ESA European Supervisory Authority

FIN-NET Financial dispute resolution network of national out-of-court

complaint schemes in the European Economic Area

IDD Insurance Distribution Directive

IORP Institutions for Occupational Retirement Provision

IRSG Insurance and Reinsurance Stakeholder Group

ITS Implementing Technical Standard

GWP Gross Written Premiums

KID Key Information Document

NCA National Competent Authority

OECD Organisation for Economic Co-o