European insurers have called on regulators to be more flexible in the wake of the coronavirus pandemic, urging them not to impose “blanket bans” on dividend payments.
On Monday (7 Sep) Insurance Europe, the European insurance and reinsurance federation, released its response to a consultation on the impact of coronavirus on the industry. It noted the global pandemic had created unprecedented challenges for insurers and stated “a certain level of supervisory flexibility is therefore crucial to enable insurers to adapt their products and services to new market realities”.
The organisation said that given the high levels of solvency within the industry “supervisors should refrain from imposing country or regional blanket bans on dividends and instead follow a case-by-case, risk-based approach to any dividend restrictions”.
In April, the European Insurance and Occupational Authority (EIOPA) urged all insurers to temporarily suspend all dividend payments and share buybacks, while the UK’s Prudential Regulation Authority also placed pressure on insurers to follow the lead of banks and reconsider the distribution of dividends.