In this insight:
Fostering a more competitive and resilient Europe: Insurance sector is keeping its promise
Climate Change, Risk Mitigation and Regulatory Changes: Responding to global challenges
Financial reporting that correctly reflects the insurance business model
Meaningful, consistent and comparable sustainability reporting
The effects of climate change on the insurance industry, the improvement of the customer journey, and the ever-changing sector regulations are three pillars that have shaped the strategic and digital transformation agendas of insurers in recent years.
Discussions at the Insurance Europe’s 14th International Conference, attended by hundreds of insurance leaders and regulators from around the world, brought attention to these, as well as the importance of collaboration, innovation, and education in addressing climate change, digital transformation, and shifting demographics in an evolving landscape.
Giving his speech at the Conference, the President of Insurance Europe – Frédéric de Courtois, Deputy CEO of AXA, emphasized the need for regulators to collaborate closely with the industry to foster a more competitive and resilient Europe. He outlined a vision for the insurance sector that focuses on prevention, protection, investment, and connectivity to address contemporary challenges.
Insurers are extending their roles beyond traditional spheres of influence, challenging the perception of insurance as something ‘dry and narrow.’ We fully agree with Juha Koponen, CEO of LocalTapiola Group, who emphasized that insurers must help young people recognize the added value of insurance. This includes providing financial education from an early age, utilizing effective digital communication, raising awareness of insurers’ significant societal roles, and engaging more broadly with civil society.
Climate change is a significant concern, with increasing catastrophic events leading to substantial global losses. In 2023 alone, the total economic losses from natural disasters worldwide were estimated to exceed 260 billion euros. According to the European Insurance and Occupational Pensions Authority (EIOPA), climate-related losses could account for 25% of total insurance losses, underscoring the financial impact on the industry. Furthermore, a report from Swiss Re indicates that insured losses from natural catastrophes have risen by 250% over the past three decades. These alarming figures highlight the urgent need for the insurance industry to adapt and innovate in response to the growing threat of climate change.
Besides tackling these challenges, as Europe’s largest institutional investor and a major industry with a unique business model, the insurance industry is also an important user and preparer of financial and sustainability (non-financial) reporting.
The insurance industry is highly regulated and supervised, including reporting requirements. Whilst good regulation is vital for a competitive and thriving industry, well-intended but poorly designed rules can have negative consequences.
At BR-AG, we believe the insurance industry must engage with policymakers and stakeholders to ensure reporting measures reflect the business model and achieve their objectives. This engagement helps insurers access the data needed for sound investment decisions while avoiding unnecessary costs and unintended consequences.
In addition, the discussion on competitiveness in a well-regulated environment highlighted the importance of efficient regulation, enhanced data sharing among regulators, and the postponement of sustainability reporting deadlines to allow for better compliance preparation.
As investors, insurers require reliable and comparable ESG data on their investments to incorporate sustainability into their decision-making processes and support Europe’s goal of achieving net carbon neutrality by 2050. This data is also essential for insurers to comply with European taxonomy and sustainable finance disclosure requirements.
In this context, European insurers support the ongoing development of EU Sustainability Reporting Standards (ESRS) by the EU Financial Reporting Advisory Group (EFRAG). Getting prepared for the ESRS/CRSD reporting leads reporting entities, including (re)insurers, to wonder what “prepared” looks like. No doubt, telling your ESG story properly takes the establishment of a strong data strategy, coupled with a technology and governance approach to manage technical complexity, and meet legislative and stakeholders’ demands. To help them get prepared, here we have gathered all the must-know essentials about the ESRS: What is the scope? Which companies are impacted? When must companies disclose sustainability information? What are our tips to get started and more.
As the insurance industry becomes increasingly data-driven, effective data management is more critical than ever. It plays a vital role in optimizing processes, enhancing customer experiences, and ensuring regulatory compliance.
In today’s fast-paced digital landscape, staying ahead of technological advancements is essential for insurers. Data management systems powered by artificial intelligence (AI) and machine learning (ML) enable automation of routine tasks, pattern detection for informed decision-making, and actionable insights from data.
However, maximizing AI’s benefits requires a balance between leveraging its capabilities and effectively utilizing internal resources. This means looking beyond surface-level promises, understanding both AI’s limitations and potential, and focusing on how it can augment—rather than replace—human expertise.
One of AI’s most valuable contributions is enhancing predictive analytics in insurance. By automating data collection and analysis, AI uncovers patterns that might otherwise go unnoticed, leading to more accurate, data-driven decisions.
The Need for Data Standardization
To fully capitalize on data-driven insights, insurers must prioritize data standardization. Standardization ensures data consistency and comparability across systems by adopting open standards like XBRL (eXtensible Business Reporting Language).
Beyond standardization, improving data quality and robustness is key to helping insurers make well-informed decisions. This is especially important as environmental, social, and governance (ESG) factors take center stage. The industry is now establishing data standards to enhance the quality of ESG disclosures, meeting the growing expectations of stakeholders and regulators.
Navigating Sustainability Reporting with CSRD
Insurers are adapting to evolving sustainability reporting requirements, including the new EU Corporate Sustainability Reporting Directive (CSRD). This directive introduces compliance challenges for both European insurers and their global subsidiaries.
Under CSRD, companies within its scope must integrate sustainability reporting into their management reports, alongside financial statements and corporate governance disclosures. The European Sustainability Reporting Standards (ESRSs) establish mandatory guidelines that companies must follow under CSRD.
To prepare for ESRS compliance, insurers should:
- Familiarize themselves with reporting requirements
- Educate and upskill teams
- Identify key reporting elements
- Determine the necessary data and collection methods
- Verify internal XBRL reporting capabilities
At BR-AG, we support (re)insurance companies by providing technology solutions and expert guidance to enhance sustainability data management and long-term reporting processes.
Regulatory reporting and consumer-oriented governance are shaping the insurance industry’s regulatory challenges. At BR-AG, we help insurers address these challenges through a technology-driven approach, ensuring automated data collection and reliable data quality validation for regulatory reporting.
We help (re)insurers navigate regulatory change management and reporting challenges, enabling them to focus on strategic growth, address global challenges, contribute to the public good, and manage sustainability risks. By implementing robust data standardization practices and automated data management cycles, we ensure a unified understanding of data within organizations and unlock actionable analytics for truly data-driven decisions.
Take a closer look at our scalable solutions and services based on open data standards, such as XBRL, and taxonomies for financial and non-financial (ESG) data reporting for insurance companies, pension funds, and other financial institutions.
