The Dutch Authority for the Financial Markets (AFM) has published a market view with good practices and recommendations following monitoring of insurers’ closed-book life insurance portfolios, focusing on service quality and the information provided to customers. The review highlights the need to keep customer interests central, including during portfolio consolidation, and sets out areas for improvement. The monitoring covered around 8 million closed-book life insurance policies that are no longer sold but may run for many years, with the number shrinking by about 7% annually. Using data analysis and discussions with a large share of Dutch life insurers, the AFM assessed strategies for these portfolios and their effects on customer outcomes; it observed cases where insurers go beyond legal requirements, such as proactively alerting customers to inadequate insured amounts. As shrinking volumes raise per-policy costs and insurers pursue scale through mergers or acquisitions, analysis of complaint figures indicated an increased risk of complaints following M&A, prompting the AFM to urge firms to maintain service levels after such transactions. The AFM describes the exercise as an interim measurement and will continue monitoring developments using a data-driven approach that combines quantitative indicators (including shrinkage and complaint figures) with qualitative inputs such as periodic discussions with life insurers.

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