Thursday, 29 September 2011
French insurers 'to seek compensation' if banks are bailed out
An insurance association in France has threatened to fight for compensation if French banks are the subject of a bailout package by its government.
Gérard Andreck, president of Groupement des Entreprises Mutuelles d'Assurance
The president of Groupement des Entreprises Mutuelles d'Assurance, GEMA, Gérard Andreck, told the French media that any eventual financial rescue for banks would give them a competitive advantage in areas where they compete with insurers, like home and auto insurance. Banks already have the upper hand in the life insurance market in France, thanks to their bancassurance units.
“We are going to ask for compensation for distortion of competition,” said Mr Andreck. “It is not normal that a sector be privileged to the detriment of another. It is a little shocking,” he went on. GEMA represents France's mutual insurance companies.
Mr Andreck said that insurers are not against helping banks when they are in real trouble, a possibility that has been vented by financial market analysts in recent weeks. But he stressed that bankers have become aggressive rivals in sectors where insurers have traditionally operated and that any kind of help would tip the scales in their favour.
Please sign up here to our full-time mailing list to ensure that you receive our weekly newsletter.
“Mutual insurers, which are cautiously managed, must not be penalised,” Mr Andreck added.
He said that it is still not possible to say how insurers could claim compensation, not least because banks have yet to be the subject of a rescue.
The insurers’ strategy will depend on the shape of any eventual bailout, he said. But the GEMA president insisted that the industry will fight for compensation if a bailout occurs.
The French media has reported that its Ministry of Economy is studying a rescue package worth between €10bn and 15bn for the country's banks, although this has not been confirmed by the government.
Credit rating agencies downgraded in September French banks Société Générale and Crédit Agricole, fearing their exposure to the debt of Greece and other embattled countries.
This week, the scrutiny reached the insurance sector after Fitch and Standard & Poor's downgraded the ratings of Groupama, citing concerns over the weakening of the firm's financial profile due to ongoing market volatility. Groupama has announced a plan to cut costs by €400m by 2014.
Please sign up here to our full-time mailing list to ensure that you receive our weekly newsletter.
French Mediator drug scandal reaches court with insurers keeping close watch
German court ruling threatens D&O policies
Asbestos point of exposure ruling provides welcomed clarity say observers
Guidance on ECJ gender discrimination ruling confusing markets-Clyde & Co
Deutsche Bank D&O insurers likely to hold firm in Kirch case
French risk managers grapple with rising pan-European civil liabilities
EC proposal adds 15 new substances to water pollution list
Lawyers prepare for battle over Concordia victims as toll mounts
EC steps up pressure on maritime safety following Concordia disaster
Airmic casualty benchmarking survey reveals buyers’ concerns
Solvency II and capacity top European risk managers’ fears finds survey
Insurers favour market-driven solutions for environmental liability risks
Business urged to respond to rise in litigation by employees in Spain
