Insurance Distribution Directive (“IDD”)  – obstacle or opportunity?

The Europe-wide implemented Insurance Distribution Directive (“IDD”), also known as Directive (EU) 2016/97, leads to major changes in the insurance distribution. We try to analyze the IDD and its consequences.

IDD and its consequences for online insurance distribution through intermediaries

On June 17, 2019 the “Verordnung Standesregeln für Versicherungsvermittlung” (“Code of Conduct For Insurance Intermediaries”) was published in the “Bundesgesetzblatt für die Republik Österreich” as the final stage of the transposition process in Austria. Thus, basic areas such as information requirements, advice about the insurance product, insurance distribution, cross-selling rules and Product Oversight and Governance (POG) have been transposed into Austrian law. We take a close look at the IDD and its consequences for online insurance distribution through intermediaries.

The IDD-compliant design of the frontend creates a new challenge for online insurance intermediaries. On the one hand, the customer should be provided with the simplest and clearest “customer journey” possible, while at the same time all legal requirements, such as providing mandatory information, specifying demands and needs, advice, have to be met. Thus there is a risk that the customer journey, contrary to the intended transparency, becomes confusing and overloaded.

IDD - Insurance Distribution Directive and its Consequences

The intention of this blog series is to pursue the question how the right placement of the mandatory information in the sales frontend can be realized and how the customer’s demands and needs as well as the advice can be executed as customer – friendly as possible. In particular with regard to the specification of the demands and needs the design of the customer journey may be oriented on the complexity of the product concerned. Is there a right and wrong? What needs to be considered and at what point?