Approximately forty insurers outsource work to authorised agents. A quarter of all non-life insurance policies are taken out through an authorised agent. Insurers remain ultimately responsible for customers who are insured through such an agent. These customers must be able to count on the same quality, rights and obligations as customers who have their insurance directly with the insurer.
What is an authorised agent?
For decades, many insurers have been outsourcing work to authorised agents. These companies have the power of attorney (authority) to take out and manage insurance on behalf of one or more insurers. An authorized agent does almost everything that an insurer does. Only the agent does not bear the risks. That is what the insurer does.
Why do insurers outsource their work through a power of attorney?
Authorised agents often worked more efficiently, so cheaper than insurers themselves and they are close to the customer. Therefore, the proxy market is growing steadily. There are now about 40 proxy insurers who have issued 1,700 powers of attorney to approximately 250 authorized offices. In recent years, the number of insurance policies that are in proxy has also risen sharply. One in four consumers has taken out insurance through a power of attorney. The premiums of non-life insurance in the proxy market total just over 4 billion euros.
The future of proxy channel
In recent years, the insurance policies taken out via a power of attorney have performed less, and sometimes even worse, than those that do not run in power of attorney. Incidentally, an improvement has been visible in the last few years. The proxy market has also received more attention. Logical, because the market has become so large. The supervisory authorities DNB and AFM have expressed their concerns about the management of risks for insurers and whether authorised agents always behave in the interests of the customer. Insurers and trustees are working this. Just like the further professionalization of the proxy channel.
Position paper Proxies
Because insurers are responsible for their outsourcing, they want to make the proxy channel more sustainable together with the authorised agents. The Dutch Association of Insurers therefore issued a position paper in 2018 with the most important action points to improve the channel and to comply with laws and regulations and with the policy of the regulators.
Initiatives with the NVGA
Our position paper was the starting point to take on a number of projects together with the Dutch Association of Proxy Insurance Companies (NVGA) in 2019, with the aim of making the proxy channel future-proof:
- Uniform Establishment of the Proxy Chain: a programme to help improve data quality in the proxy chain. The program is carried out by an independent foundation.
- Future-proof Proxy Chain: together with the NVGA, the annual figures of the proxy market are monitored and published annually.
- Timetable Fraud Control Powers of Attorney: in 2020, the timetable published in 2019 was expanded with guidelines for income insurance. In addition, the Sanctions Act Proxy Guideline was updated in 2021.
- Customer Interest Central: in 2019, the Guideline Customer Interest Central Powers of Attorney was published. Together with the NVGA, a 2.0 version of the Guideline customer interest Central Proxy was published in 2020 in which 'behaviour and culture', the so-called soft side, was also given a place.
- Risk management Proxies: the existing Work Programme risk management powers of attorney is updated annually and an Auditor's Protocol for the following year is finalised.
- Implementation of Good Practice DNB: the Association and the NVGA jointly implement a good practice of DNB, published in 2019, including in the VSV and the Work Programme.
- Example Cooperation Agreement Power of Attorney (VSV): With the latest VSV and the Example Pool Agreement, insurers can comply with the latest laws and regulations.