Axa criticises regulatory confusion over dividend policy
Axa chief executive Thomas Buberl has hit out at the regulatory confusion over European insurers’ dividends, saying he found it “difficult to accept” that central guidance should be applied differently across the EU.
The European insurance regulator, Eiopa, last week urged insurers not to pay dividends because of the coronavirus crisis. But national regulators, which have the final say on how insurance companies are run, have taken different stances.
In France the ACPR, which regulates Axa, supported Eiopa’s call. But Germany’s BaFin has not imposed a blanket ban so companies such as Allianz and Munich Re are still planning to pay out.
All EU insurers are governed by the bloc’s Solvency II rule book.
“It is relatively difficult to accept that we live in a common Europe,” said Mr Buberl in an interview with the Financial Times. “We have the same capital standards and yet there are very different applications across the different regulators.”
Axa has postponed its annual general meeting by two months until the end of June in the hope that the regulators come to some agreement before then. The Axa board has not yet withdrawn its dividend proposal.
Mr Buberl said the delay “gives us enough time to see what and if they work something out”.
He also added his voice to growing calls from the insurance industry for a public-private partnership to cover businesses in the event of future pandemics.
Insurers have said that most business interruption policies exclude costs caused by infectious diseases, prompting a wave of criticism from customers and politicians. Any effort to force them to pay out beyond the terms of the policies, the insurers added, would be an existential threat.
“One learning from this crisis is that we were not prepared,” said Mr Buberl. “We need to start building an insurance regime for if another pandemic happens.”
He proposed a system similar to France’s Caisse Centrale de Réassurance, in which a small part of every insurance premium is kept aside and used to fund coverage for large natural disasters provided by both a pool of private insurance companies and the government.
“Private companies [have] skin in the game from the first Euro,” said Mr Buberl. “The insurance industry can take a lead role . . . and it needs to happen in co-operation with the state.”
His suggestion echoes similar proposals which have been made by the Association of British Insurers in the UK and by John Doyle, chief executive of insurance broker Marsh, in the US.
Mr Buberl said these arrangements were likely to be made at a national level rather than more broadly.
“Ideally to foster the European spirit, which has probably suffered a little bit in the crisis, I would love to have something like this on a European level,” he said. “But . . . the realistic answer is to do it on a more national level as a first step.”