Underwriters in Europe fear their efforts to access emerging markets will be thwarted by ongoing protectionist measures.
Insurance Europe has published a series of country fact sheets that identify what they see as barriers to both access and trade in a number of major markets. The countries that have been identified are Argentina, India, Indonesia, Canada and Brazil.
In a statement Insurance Europe said: “Removing these barriers is vital to reduce protection gaps and to avoid dangerous concentrations of risk in these jurisdictions. Furthermore, to avoid a build-up of climate-related risks in any one jurisdiction and to facilitate the sharing of natural catastrophe risk across (re)insurance markets, it is more important than ever that discriminatory barriers to trade and market access be removed.”
It explained in Argentina, foreign (re)insurers face several barriers, including restrictions on cross-border (re)insurance, compulsory investment constraints and foreign exchange restrictions on reinsurance payments.
Barriers in Brazil include restrictions on the reinsurance and retrocession limits applicable to cessions to occasional reinsurers, minimum insurance retentions by local cedants and their right to first refusal of business.
The review of the Canadian reinsurance regulatory framework includes several potential market access barriers to foreign reinsurers that conduct business on a cross-border basis. This could increase Canada’s protection gap, as reinsurance capacity could be reduced significantly.
“While recent changes in Indian (re)insurance regulations have introduced some positive developments towards the further opening of the (re)insurance sector, European (re)insurers remain concerned about several discriminatory measures concerning foreign investments and the situation of foreign branch offices,” added the organisation. “Indonesia is moving gradually towards the liberalisation of market access for foreign (re)insurers. However, new market access rules could create an uneven playing field between foreign reinsurers.”