Life Insurance Luxembourg: outlook and challenges

Aurexia shares with you its latest publication on the Luxembourg Life Insurance market. In 2023 and going forward, Luxembourg Life insurers will continue to face many challenges.

  • In terms of business, premiums collected in 2022 were 11% lower compared to previous years, and 45% of total funds were collected by the TOP 5 life insurers. Even if the 2023 results seem encouraging so far, distribution channels do not perform equally well.
  •  As for regulation, the challenge ahead is the new Retail Investor package that will deeply impact product manufacturers and distributors.
  • Finally, technology is still a key differentiator. Some new technologies, like Artificial Intelligence, Process Mining & Natural Language, can provide a substantial competitive advantage.

In order for Luxembourg Life insurers to face to these challenges, Aurexia has identified 5 strategic areas of work to explore. 

Our Global Life Insurance expertise

Life Insurance strategy

  • Distribution Directive (IDD) strategic impacts : Assessment of the impacts of IDD on the activities of SGLIB which distributes insurance products as a broker and co-broker
  • Business case to insource the valuation of life insurance products (FID? FIS, FAS) previously outsourced to an Asset Servicer
  • IT evolution scenario assessment  to support the Life Insurer’s strategy
  • Data governance & CDO roadmap design
  • Market study for the launch of a unit linked product in Spain from Luxembourg (LPS)

Regulatory and  Compliance

  • Monitoring regulatory financial audits
  • Regulatory impact assessment, gap analysis and implementation plan on IDD : conception & validation of new products, significant adaptation of the existing products, products follow-up processes)
  • IDD  – Gap analysis between the EU Directive and its national transposition : follow-up of gap analysis between as-is and regulatory expectations by country and according to IDD themes
  • PRIIPs: Compliance with PRIIP’s regulations with the delivery of KID contracts
  • Solvency2: identification & monitoring of S2 impacts
  • IFRS17 impacts assessment & implementation

Operational excellence

  • Target Operating Model design: as is analysis and target design following the implementation of a new PMS and the internalization of the products’ valuation
  • Connectivity platform with depositary banks: Implementation of a new connectivity platform to manage communications with 40 depositary banks & Selection and implementation of a Portfolio Management System
  • Selection & implementation of a PMS: and integration in the IT architecture (+30 interfaces) to build STP processes
  • Selection & implementation of a PRIIPs reporting software: selection project management from the scoping phase to the delivery of KIDs

Innovation and Digital

  • Extranet deployment: design, development and deployment of the LMEP extranet: functional requirements, workshops facilitator, test design and execution
  • Review of the customer journey, benchmarking of aggregation solutions, studies on process automation
  • Design and implementation of a robo-advisor
  • Implementation of a Data Management Office :  Identify for the pilot departments a set of critical data according to an analysis grid and through interviews and define for each critical data a set of controls / quality indicators.