(Ahead of the Paperjam Club’s , which will take place on 19 November at the Kirchberg Kinepolis, we have decided to give the floor to key players in the financial centre. We’re publishing their guest contributions every morning until the event. Today, the managing director of Aca, , shares his point of view).

But it hasn’t been easy: our sector has undergone several major transformations, influenced by technological, economic and regulatory trends. In each of these transformations, Aca has supported its members in the challenges they have faced and has contributed to the decisions that are essential to guaranteeing the sustainability and attractiveness of the sector, while keeping European consumers at the centre of our concerns. Let’s take a look back at some of the major transformations that have shaped our sector over the last decade.

Increased digitalisation and artificial intelligence

The use of advanced technologies, in particular artificial intelligence (AI), blockchain and machine learning, has made it possible to achieve a high degree of automation in claims management, fraud detection and the personalisation of offers. These technologies have also enabled operators to comply with regulatory requirements with agility.

The fully digitised customer experience has been considerably simplified and improved.

Hyper-personalisation of insurance products

Thanks to the data collected (driving habits, health, etc.), insurers are able to offer hyper-personalised policies. In car insurance, individualised offers based on the monitoring of driving habits via connected cars are being proposed, adapting to the profile of each customer.

Regulatory developments and green taxation

With regard to distribution, the distinction between “retail” and “informed” customers has been established for the insurance sector. From now on, this categorisation will be taken into account in order to provide the best possible support to all customers by offering them an appropriate level of protection.

On the subject of professional secrecy, an exemption from professional secrecy for requests for the declaration of personal data from foreign authorities has been included in the law. What’s more, the law on the insurance sector has been amended to allow for the outsourcing of intra- and extra-group service providers, as well as cloud services. This is a real relief for players in the Luxembourg financial centre, who are no longer exposed to criminal prosecution or substantial administrative fines for violating either Luxembourg law or foreign law.

To cope with an ageing population, the use of supplementary group pensions and individual provident schemes has been widely encouraged. The supplementary group pension scheme has been modernised, with an increase in the thresholds for eligible payments, the introduction of a reduced flat-rate tax for employees under the age of 40 and greater flexibility in cases of early withdrawal.

Ireland is still one of our natural competitors, but the cards have been reshuffled and the game is finally being played on a level playing field with no VAT on management fees in either country.

The Luxembourg financial centre is a recognised green financial centre, and the insurance sector is no exception to the rule, with investments that are not green enough having long ceased to be an option. The simplification of regulatory texts published 10 years ago and their successful adaptation to the specific characteristics of the Luxembourg market have largely contributed to this success. Insurers, encouraged to develop products that support the ecological transition, have responded to this new challenge. One example is the creation of a sustainable Luxembourg pension product with increased tax-deductible ceilings.

Luxembourg’s transposition of the various directives prepared at European level, following the rule “The directive, nothing but the directive,” has borne fruit. Without unnecessary gold-plating, the financial centre has been able to remain competitive on regulatory issues, and our agility in this area is now a sought-after example for our European neighbours and beyond.

A dedicated regulator recognised for its expertise

Our dedicated regulator has gone from strength to strength. To cite just one example, the review of Circular 15/3 published 10 years ago demonstrated the effectiveness of the dialogue between our regulator and the industry.

The impact of climate change and the emergence of new risks

With the increase in natural disasters, cover against climate risks has become an essential element of insurance policies for both legal entities and individuals. Insurers and reinsurers have played a key role in prevention and support, making it possible to better manage some of the impacts of climate change.

Non-life insurers continued to increase their presence in the grand duchy by innovating and developing cover adapted to new risks, such as the successful arrival of autonomous cars, the widespread use of drones for private or professional deliveries, and digital civil liability.

Our sector has established itself at European and international level as an expert in covering cyber security risks in the face of growing digital threats.

The role of insurtechs and strategic partnerships

Insurtechs continue to transform the sector by offering disruptive solutions.

Partnerships between traditional insurers, insurtechs and other financial players have continued to multiply. These collaborations have strengthened an ecosystem that partly explains the success of recent years and our attractiveness.

Expansion into new markets and internationalisation

Luxembourg’s regulatory environment makes it a destination of choice for international insurance companies, consolidating the country's role as a European hub.

The various countries of the European Union have understood the benefits of a diversified and effective offering in the single market: while preserving their national interests, they allow the Luxembourg offering to coexist with their national offering without hindrance. The principles of freedom to provide services and freedom of establishment now operate smoothly at European level and are no longer called into question.

The arrival of a new generation of consumers

The various financial education programmes set up over the last 10 years at national level and more widely at European level are bearing fruit. They are bringing onto the market consumers who are more aware than their elders when it comes to investment, and who want to prepare for their future by investing today.

Human resources and attracting talent

With the rapid digital evolution of the sector, demand for profiles specialising in data science, cybersecurity, artificial intelligence and the development of digital solutions has been extremely strong. Faced with increased international competition, Luxembourg has redoubled its efforts to attract these talents. The results of initiatives taken 10 years ago are finally bearing fruit. Our sector is often cited as an example by the minister of finance as the sector where the gender gap does not exist and where the place of women at all levels of our organisations is a reality.

So, 10 years ago, there wasn’t much missing to get the ball rolling and make our sector even more attractive and competitive. All the cards were there, it was just a question of distributing them intelligently, bearing in mind the primary role of our industry: an industry that protects and that, resolutely turned towards the future, accompanies all the changes in our society and our economy.

This article was originally published in .