1. 11 June 20141 WP3 - Insurance Mapping Update & Recommendations By Thomas Dunand, Hannover Re Forum Meeting 6, DG ENTR, Brussels

2. Schedule 11 June 20142

3. Next steps Integration of TSI in the Mapping Visit of German contacts Final recommendations 11 June 20133

4. Update of the mapping Significant modifications for: – Croatia – Austria – Netherlands – Norway – Spain 11 June 20134

5. 11 June 20145 Significant modifications Other Member States Update of the mapping

6. Recommendations Two main categories of recommendations for improving the accessibility to construction insurance: – Improving the access process to the existing “construction systems” – Modifying the “construction systems” themselves 11 June 20136

7. Improving the access process 11 June 20147 Insurance Technology Culture Wealth User practices Environmental conditions Legal framework Markets Insurance Technology Culture Markets User practices Environmental conditions Wealth Legal framework System Configuration Country A System Configuration Country B

8. Improving the access process - through transnational communication By increasing the insurance offer*: – Improve failure forecast of innovative technologies through information sharing (EQEO) + Hazard notification procedure – Improve risk assessment through Quality Signs information sharing (WP1) + Improve “relevancy” of existing quality signs (e.g. extension of ETA toward climatic conditions or installation considerations) – Harmonize TIS accreditation / recognition by insurers – Promote a European IDI cover (*) to accompany a contractor abroad or to meet a foreign request 11 June 20138

9. Improving the access process - through transnational communication By facilitating the subscribing procedures: – Add to the existing Points of Single Contact sites a specific standardized* “construction insurance access” administrative procedure guide – Add Elios mappings to the PSCs – Require their Update by the Member States – Add to PSCs a national complaint submission procedure – Add to Solvit an EU level complaint submission procedure, transmitted to an European construction insurance ombudsman (*) language, fields, format … 11 June 20139

10. Improving the access process - through international communication 11 June 201410 ProposalProsCons EQEO Real current lack of information exchange Should clarify real problems / usefulness of information Available information from public sources only Confidentiality Financing Hazard notification procedure Efficient (if carried out as proposed) Implementation Quality Signs Database Real current lack of information Usefulness for insurers Based on a voluntary contribution Absence of grading Improve quality signs Improvement of relevancy / usefulness for insurers Calls into question current approach In-depth / long-term work

11. Improving the access process - through international communication 11 June 201411 ProposalProsCons EU TIS accreditation Harmonization of TIS to support insurance Made by whom for whom? Promote an EU IDI EU Members benchmarking of consumer protection Difficulty to reach / inform owners ProposalProsCons Access Procedure Guide Pragmatic solution to accessibility difficulties Rectifies current situation Effectiveness of enforcement / implementation Add Elios mapping to PSCs Concentration of the information Difficulty to reach / inform owners

12. Improving the access process - through international communication 11 June 201412 ProposalProsCons Update of mapping by Member States Quality of information Update cost transfer Effectiveness of enforcement PSCs Complaint submission procedure Objectivation / Realization of accessibility problems by governments None Solvit Complaint submission procedure Ease of use Standardization of feedback sources None EU level Ombudsman Allow to find real pragmatic solutions to accessibility difficulties New expense for EU

13. Modifying the “construction systems” 11 June 201413 Insurance Technology Culture Wealth User practices Environmental conditions Legal framework Markets Insurance Technology Culture Markets User practices Environmental conditions Wealth Legal framework System Configuration Country A System Configuration Country B

14. 11 June 201414 Modifying the “construction systems” Current level of guaranties* Level of protection Non consequential Financial Loss Consequential Financial Loss Whole building Third parties Third parties Non consequential Financial Loss Consequential Financial Loss Whole Building Damage to the work itself Start of WorkHandover+ 10 years (*) of contractors, architects, engineers, inspectors

15. 11 June 201415 Modifying the “construction systems” Desired level of guaranties* Level of protection Non consequential Financial Loss Consequential Financial Loss Whole building Third parties Third parties Non consequential Financial Loss Consequential Financial Loss Whole Building Damage to the work itself Start of WorkHandover+ 10 years (*) of contractors, architects, engineering firms, inspectors

16. Modifying the ”construction systems” By setting new regulation: – Require from all EU Members a common minimum level of guarantee* on solidity / stability of the contractors, architects, engineers and inspectors’ liability (construction work value for contractors, percentage of the Total Construction Value for “designers”) – Include in the Freedom to Provide Service the obligation to satisfy the “host Member” State’s regulation instead of the “home Member” which leads to an insurance race to the bottom (*) whether contractual or legal; and of property or liability type 11 June 201316

17. Modifying the “construction systems” - by setting new regulation 11 June 201417 ProposalProsCons Set a minimum level of guarantee for contractors and designers Reduces the gap between countries, hence facilitates transnational activity for both firms and insurers Increases the protection of consumers The guarantee has to be fitted to widely different national systems (legislation, regulation …) Resistance to harmonization Modify Freedom to Provide Service law from “home state” law to “host state” law compliance Stop of this unfair competition which leads to a race to the bottom in consumer protection None

18. Energy Performance Guarantees Review: – Huge hurdles to insure individual houses and dwellings: Dependency on consumer’s behaviour Separation of appliances vs building consumption (inherent performance of the building) Need of equipment maintenance (ventilation) Recommendations: – Standardise the conventional performance definition and calculation – Promote electrical installation which permits “inherent performance” measurement 11 June 201318

19. Debate What are the hurdles to the adoption of harmonised minimum guarantees? Therefore, is transnational communication the only path toward harmonisation? 11 June 201419