Consumer Trends Report: Business continuity ensured, but a number of issues emerging from COVID-19

The European Insurance and Occupational Pensions Authority (EIOPA) published today its Consumer Trends Report with a risk heat-map  providing a snapshot of the impact of the COVID-19 crisis on the insurance and pension sector from a consumer protection perspective as of 30 June 2020.

Despite initial concerns, insurers and pension funds have  maintained business continuity. Buying products, submitting claims and complaints, or seeking information have carried on broadly as normal — though in new forms as digitalisation trends have accelerated. When consumers may have found themselves in breach of contractual obligations because of the forced changes in habits and behaviours, insurers have shown forbearance.

While the full extent of the effects of COVID-19 on consumer trends is still to be revealed, EIOPA identified a number of key issues emerging from this initial crisis phase:

COVID-19 has also taken its toll on the pension sector. In particular, cases of lower pension contributions emerged where savers were not able to continue contributions, due for instance to business shrinking or due to unemployment. Further risks in the decumulation phase may crystalise, with the potential to lead to future cuts in benefits.

To alleviate the impact of the COVID-19 outbreak on the insurance and pension sectors, whilst ensuring fair treatment of consumers, national supervisory authorities as well as the insurance and pensions sectors have taken specific measures. As the crisis continues to unfold with potential impacts on profitability,  conduct risks can be expected to continue to crystallise and emerge. It is therefore of great importance that concerns regarding financial exclusion, contract clarity, and unit-linked products are adequately addressed and mitigated.

Download the report and the heatmap