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IUA plans to address, and publishes report on, ‘risk transfer’ issues  

Link(s):IUA 2025 plan addresses the changing nature of risk transfer
IUA publishes cascaded risk transfer report

Context

The IUA has announced that its 2025 Plan will seek to address the changing nature of risk transfer, and has published a report on cascaded risk transfer (“ ‘Risk Transfer Regulation and Market Practice – a survey of key European markets”), available to download by IUA members.  In reviewing its core services for London insurers to address the changing nature of risk transfer, the IUA plans to develop a central risk function to address issues such as sustainability and cyber risk.

In relation to the different requirements and approaches encountered in fifteen key European markets, the IUA has published a report and guide to help insurers navigate money handling requirements in the European Union.  Across the continent insurers face varying approaches to risk transfer and the distribution of insurance through agents, sub-agents, or brokers. Often, they have to agree to ‘cascaded’ risk transfer, making them responsible for funds held by parties further down the distribution chain.

Key points to note and next actions

  • The 2025 Plan also focuses on education initiatives, claims issues, regulatory developments and operational digital enhancements.
  • The Association is expanding its training opportunities in response to increased demand from companies looking to develop next-generation talent. Around 40 events, policy wording masterclasses and networking breakfasts are planned together with introductory examinations for professional indemnity and directors and officers practitioners.
  • Claims good practice guides will be published, and evolving claims trends (particularly social inflation and the growth of third-party litigation funding and class actions) will be investigated.
  • The cascaded risk transfer publication states whether risk transfer is possible or, indeed, mandatory. It also describes how risk transfer can be cascaded and the general market practice for the protection of premium and claims funds held by a sub-agent.