Depuis sa publication le 24 mai 2023, le projet Retail investment strategy a fait couler beaucoup d’encre et provoqué de nombreuses réactions, notamment par France Assureur le 5 juin. MEP Stéphanie Yon-Courtina also published a report on the subject on 5 October.
The main objective, which all stakeholders consider to be laudable, is to promote investment by European savers (individuals and small businesses) in the European economy, particularly in sectors favoured by public policies.
The European Commission takes this opportunity to put its foot in it and wishes to reform the remuneration of intermediaries in order to make it more favorable for savers (and we can imagine, for policyholders generally speaking, in the future), from its point of view.
It is particularly the commissions that are targeted by the Commission because it believes that they can bias the advice given by intermediaries and especially brokers. Several countries have already banned these commissions themselves.
Beyond savings products, the profession has moved on the subject and intermediaries fear that their remuneration methods will be modified in the future, disrupting their economic models.
So let’s analyze what these changes might involve for non-savings insurance.
Firstly, an insured can agree to pay filing or entry fees but in their mind, this compensates for administrative setup costs while the advice generally cost much more. Moreover, the advice is part of time. Indeed, these products require regular adaptation according to the evolution of the insured’s situation and the intermediary must remain in contact or, at a minimum, available and aware of the file for this first throughout the life of the insurance contract.
This therefore requires a recurring remuneration that will be deducted from the client’s payment. Today, this payment often covers a premium that includes everything (the technical premium, the loads, the additional guarantees such as assistance, etc.). Tomorrow, this payment will have to distinguish more clearly what belongs to each one. The key will be that one of the actors (the insurer, a delegate, the intermediary itself) can deduct in one go and then distribute the shares to the others. The whole issue of possible future regulation is to know to what extent it will allow insurers to charge the fees of external intermediaries (agents and brokers), even if it means that contractual transparency is perfect. If this is not the case, it will make direct distribution by brokerage insurers difficult and they will then be led to delegate the management of this activity to managers, wholesalers, who will be the integrators of the offer in order not to have to charge the fees of the suppliers.
The second point is the difficulty of financing the commercial act. Indeed, the client expects to pay a relatively constant contribution and rather cheaper than what he had previously, it is precisely in the interest of the competition. However, on the other hand, the initial commercial act costs more than the monitoring council. Brokerage firms therefore have a much greater need for working capital than other traders. Brokerage firms therefore have a much greater need for working capital than other traders. This method of remuneration has always been in the eye of the finder and it may be that one day when the other one disappears. It may even naturally disappear due to other regulatory developments that were not the goal (infra-annual termination, for example).
However, there are other ways to finance working capital needs and the disappearance of this method of remuneration would in no way be the end of the world for this type of traditional distribution.
There is finally a tax issue with these regulatory developments. Hitherto, as intermediaries were mainly paid by commission, they were considered an integral part of the function of the insurer itself and these commissions were subject to tax on insurance. If tomorrow the intermediaries were no longer to be paid from the insurers’ premium but via fees, they would then be subject to VAT instead. As a result, they could then recover it and would no longer be subject to the corresponding special tax on wages, which would bring brokers back into the administrative normality of other traders, which would simplify things.
