The Posi­ti­ons of Ger­man Insu­rers in 2020: Regu­la­tion

More fle­xi­ble, straight­for­ward and pro­por­tio­nal

We find ourselves increasingly confronted with the question of whether the cost of regulation is proportionate to the benefits.

A solid political and regulatory environment is a prerequisite for growth and welfare. This includes the protection of property rights, fair competition rules, and the essential consumer protection standards. At the same time, excessive regulation can restrict market dynamics. If there are a large number of different requirements in place at one time, there is more risk of overlaps and inconsistencies. Therefore, there is a constant balancing act to be maintained between the costs and benefits of regulatory policies. Since the 2008 financial crisis, Europe and Germany in particular have been subjected to increasing regulation. This has affected insurers most of all, although they have always been one of the most regulated sectors owing to their importance to the economy and the special nature of the insurance business. We find ourselves increasingly confronted with the question of whether the cost of regulation is proportionate to the benefits. This depends on three factors: Regulation should be equally flexible, straightforward and proportional. The special characteristics of individual companies’ models are not adequately accounted for by supervisory authorities. Before attempting to answer the question of how to implement the requirements in individual cases, an assessment should be made as to whether they are appropriate and necessary for the company from a risk perspective.


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