The European Insurance and Occupational Pensions Authority said in its third report on the application of the Insurance Distribution Directive, published on 30 March 2026, that the rules have improved standards in some parts of the market but have not removed longstanding consumer frustrations around how insurance is sold. Eiopa concluded that the framework still leaves important gaps in digital distribution and AI-based advice, while sales processes can remain burdensome without necessarily leading to better product choices.
For ordinary buyers, the central message is that more regulation has not always made purchasing insurance simpler. Eiopa found that online sales still account for less than 10% of total premiums in most markets and remain concentrated in straightforward products such as motor and travel insurance. At the same time, generative AI is increasingly being used through chatbots and sales tools, even though the directive does not comprehensively regulate digital channels or set out detailed guidance for AI-based or automated advice.
Sales recommendations
One of the clearest consumer warnings in the report is that more extensive sales conversations do not necessarily produce better recommendations. Eiopa said its mystery shopping exercise on insurance-based investment products found only a limited link between the thoroughness of the sales process and whether the products offered actually matched shoppers’ profiles. Longer and more detailed sessions, it concluded, did not always translate into better outcomes, suggesting the process may need to be simplified rather than expanded.
The watchdog also said quality had improved in some markets following supervisory action and follow-up inspections, but that significant weaknesses remained elsewhere. Those included complaint patterns such as very long claims-processing times, an issue with direct implications for policyholders who only discover the quality of cover when they try to use it. Consumer groups cited in the report also argued that buyers are not always able to see prices directly from insurers and may have to go through intermediaries instead, making comparisons harder and potentially increasing costs.
Commissions and bundled cover
The report also points to enduring concerns over incentives in the market. Eiopa stated that misaligned incentives and insufficient transparency still pose risks to consumer protection in some countries, particularly in the sale of life insurance and credit protection insurance. Some national regulators told the authority they are considering tighter restrictions on commissions, including possible bans or tougher disclosure rules.
That matters because buyers often do not see how strongly remuneration structures can shape what they are offered. Eiopa’s market data show commission-based pay remains the dominant model for intermediaries across the EU, prevailing in 24 member states in 2024, while fee-based models were prevalent in only one and mixed fee-and-commission structures in three. The authority also said some national supervisors found that cross-sold insurance, such as cover bundled with another product or service, often offers poor value for money, carries high commissions and can be harder for consumers to understand.
Sustainability questions confuse buyers
Another weak point identified by Eiopa is sustainable finance. The authority said sustainability disclosures and consumer preference assessments are often poorly understood and inconsistently applied. It also pointed to knowledge gaps among distributors and mismatches between regulatory frameworks, raising doubts about whether the current rules are proportionate or effective in improving outcomes for consumers. While unsuitable products were offered only in a limited number of cases, the watchdog signalled that the present system is not working as clearly as intended.
For consumers, that means “sustainable” insurance-related investment products may still be difficult to assess in practice. The report suggests that additional disclosure has not automatically made choices easier and may in some cases have added to the information overload already criticised by market participants and consumer groups. Eiopa said there is room for more clarity on the demands-and-needs test, the suitability assessment and the scope of insurance distribution itself, especially where indirect selling and digital tools are involved.
More cross-border selling
The structure of the market is also changing in ways consumers may notice over time. Eiopa said the number of registered insurance intermediaries in 24 member states fell 7.5% between 2020 and 2024, extending a longer-term decline driven by consolidation, retirement, stricter professional requirements and the removal of inactive firms from registers. Over the same period, however, the number of intermediaries with an EU passport rose 12%, indicating greater interest in selling across borders even if the true scale of that business remains unclear.
That combination points to a market with fewer distributors overall but potentially more cross-border activity and more reliance on digital tools. Eiopa said the typical intermediary in Europe remains a natural person acting on behalf of one or more insurance undertakings and selling insurance rather than a broader range of products, but the broader direction of travel suggests consumers may increasingly encounter less localised and more standardised sales models.
What next
Eiopa stopped short of saying the Insurance Distribution Directive has failed. It said the regime continues to provide minimum standards for fair and transparent insurance distribution across the EU. But it also made clear that digitalisation, selling practices and sustainability integration still require closer attention, and that the findings will feed into supervisory convergence work, the European Commission’s Retail Investment Strategy and a future review of the directive.
For consumers, the practical conclusion is less flattering than the legal framework suggests. Buying insurance in Europe may now involve more forms, disclosures and process steps, but Eiopa’s latest review indicates that it can still be too hard to compare prices, understand what is being sold and know whether the product really fits the buyer’s needs.
