42. Activities and objectives in 2020
Based on external and internal developments, activities in 2020 focused on the following:
- AXA integration
- Review of Solvency II (holistic impact assessment)
- GRC tool implementation
The world was affected by the global Covid-19 pandemic earlier this year, and this has had a significant impact on many nations around the world, on the global economic system and, as a result, on the solvency position of insurance companies. UNIQA therefore set up a crisis management team in which a group of experts from different areas regularly monitors developments associated with the spread of the coronavirus as well as the effects on UNIQA in order to be able to make decisions and implement the corresponding measures. The challenge of having all employees work remotely was mastered within a very short time, meaning that business was able to continue with almost no problems. The crisis management team continues to monitor further developments with the pandemic in order to be able to implement measures at short notice if necessary.
Due to strong capitalisation in recent years, UNIQA already actively expressed its interest and willingness some time ago to make an acquisition in its core markets in Central and Eastern Europe. On 7 February 2020 UNIQA officially announced the acquisition of AXA’s subsidiaries in Poland, the Czech Republic and Slovakia, which was completed on 15 October 2020. This transaction involving the AXA subsidiaries significantly increased UNIQA’s market share and led UNIQA to become the fifth largest player in the CEE market. The preparations and activities for integrating the processes and employees from the new companies into the UNIQA Group began in 2020. This topic continues to affect UNIQA in the fourth quarter of 2020 and beyond, with a merger of the AXA companies with the UNIQA companies being the next step planned. As stated above, the greatest challenge will be the integration of all the processes, employees and IT systems.
As in the previous year, the topic of the Solvency II Review continued to occupy UNIQA in 2020. The European Insurance and Occupational Pensions Authority (EIOPA) already published extensive consultation papers in 2019, containing a total of 19 topics divided into two consultation waves. These waves dealt with both qualitative (e.g. Group supervision, macro-prudential issues, reporting and disclosure) and quantitative topics (e.g. risk-free rate, risk margin, SCR, own funds). Although the review of Solvency II is not binding in nature, the initial proposals already determine the direction in which the entire Solvency II framework may change. EIOPA carried out two holistic impact assessments in 2020 on this topic in order to gain an overview of the quantitative impact of the proposals. UNIQA took part in these assessments. There is therefore a project in place with a group of experts analysing the impact of this review on the company. This will enable UNIQA to prepare for upcoming changes in good time and mitigate the risk of being unable to meet future regulatory requirements.
UNIQA has been working intensively on expanding the concept of its internal control system (ICS) in recent years. The primary focus in 2020 was on creating an IT solution for this. A Governance, Risk & Compliance (GRC) tool was introduced in order to support implementation of the ICS through the systems. The challenge here in particular was in the conceptual coordination of four areas (compliance, security management, data protection and risk management) and then reflecting this in the tool.