1. Late announcement of the implementation details
The IDD and the German legislature draft provide that the main details will either be released by the European or national regulations. Currently, only the draft by EIOPA for the information sheet for non-life insurance products has been released. The implementation of the German directives will only take place after the adoption of the legislative amendment at the beginning of July, and this runs the risk of further delays due to the German parliamentary election campaign. Insurers, who are waiting for final clarification on all issues, will hardly manage a timely implementation. Therefore, foreseeable fields of action should already be identified now, preparatory measures be initiated and resources planned accordingly.
2. Underestimated expenses
Some insurers are still underestimating the implementation expenses associated with the distribution regulation. Because the IDD does not only affect the original insurance sales. Many additional business areas such as operations, compliance, product development as well as IT are also affected by the mandatory implementation. In order to ensure that the information requirements are met, extensive process changes need to be performed across the different business areas. Alone the IT landscape adaptations necessary for this as well as the knowledge transfer to the intermediaries will incur a fair amount of work and expenses for insurers.
3. Isolated view
Insurers who are going about their implementation projects in an isolated manner and not an interdisciplinary one, are missing out on synergy effects. As insurers are facing legislation projects such as the MiFID II and PRIIP regulations in addition to the IDD in close succession, identifying and adapting dependencies and cross connections to other regulatory projects will pay off. This is only possible if bridging the gap between insurance sales, IT and compliance takes place at an early stage.
4. Short-term orientation
By merely focusing on the mandatory tasks, some insurers are at risk of losing sight of the bigger picture in the implementation of IDD. The IDD should also be seen as an opportunity for repositioning oneself and preparing for the future with regard to consultancy processes or remuneration systems. At the same time, the question arises of whether the IDD should not also be the trigger for the use of new technologies. After all, in the long-term, these support compliance with current and potential future additional consultancy and information obligations which are to be expected in years to come.