Various insurers outsource work to authorised agents. A quarter of all non-life insurance policies are taken out through an authorised agent. Customers must be able to count on the same quality, rights and obligations as customers who take out their insurance directly with the insurer. Insurers remain ultimately responsible for customers who are insured through such an agent. To guarantee this, the Dutch Association supports insurers in complying with the laws and regulations.
An authorised agent is a professional financial services provider who has the authority (power of attorney) to act directly on behalf of one or more insurers (and/or banks). An insurer can outsource most of its activities to (have it carried out by) an authorised agent. For example, the authorised agent makes quotes, accepts and changes insurance policies, conducts the policy administration and collects the premium. In addition, he settles claims independently, except for personal injury claims. So, an authorised agent does almost everything an insurer does. However, the authorised agent does not bear the financial risks. The insurer does that. This is regulated in the Financial Supervision Act.
An authorised agent may work through his own mediator (house power of attorney) or through independent mediators appointed by him. An authorised agent has his own licence from the Netherlands Authority for the Financial Markets (AFM).
Authorised agents sometimes work more efficiently, i.e. cheaper than an insurer itself and they are close to the customer. Therefore, the proxy market is growing steadily. There are now about 40 proxy insurers that have issued 1,700 powers of attorney to approximately 250 authorised offices. In recent years, the number of insurance policies that run under power of attorney has also risen sharply. One in four consumers have taken out insurance through a power of attorney. The premiums of non-life insurance in the proxy market total almost four and a half billion euros.
The proxy market has received more attention in recent years. Logical, because the market has become so big. The regulators DNB and AFM continuously pay extra attention to the management of the risks for insurers and ensure that authorised agents always behave in the interest of the customer. Insurers and authorised representatives are working this. As well as the further professionalisation of the proxy channel.
Because insurers are responsible for their outsourcing, they want to work with the authorised agents to make the proxy channel more sustainable. The Dutch Association of Insurers therefore published a position paper in 2018 with the most important action points to improve the channel and to comply with laws and regulations and the policy of the regulators.
Also in 2018, the Dutch Association of Authorised Insurance Companies (NVGA), the trade association for authorised insurance companies, published a position paper. Together with the NVGA, the Association has included the joint action points in an administrative work agenda, the so-called Proxy Dashboard. In January 2023, the NVGA published a Market Vision 2023-2025 . Joint action points contained in this report have also been incorporated into the administrative work agenda.
Our position paper was the starting point to take up a number of projects in 2019 together with the Dutch Association of Authorised Insurance Companies (NVGA), with the aim of future-proofing the proxy channel: