Recommendation U: minimum insurance value for the customer will increase confidence in the market

Luc Williams

Serious illness, chronic disease, loss of income are concerns that – according to the “Protect Project Oneself” study prepared by Ipsos on behalf of BNP Paribas Cardif in June 2024 – are shared by as many as two-thirds of Poles. The results of the study became the starting point for the discussion on the new Recommendation U during the European Financial Congress. As noted by Grzegorz Jurczyk, CEO of BNP Paribas Cardif in Poland, insurance products are intended to reduce these concerns. A person who decides to take out a loan wants to be sure that he will repay it, and this is what CPI products, i.e. loan repayment insurance, serve. Recommendation U regulates customer value, i.e. the minimum value of such products for the customer.

As Adrian Adamowicz, member of the management board for retail and corporate banking at VeloBank, noted, the market has a long way to rebuild customer trust.

– We have clients who have certain beliefs and certain attitudes. It takes time and this type of regulation (like the new Recommendation U – editor) to change this attitude. What we have today, which is 30 percent. product value for the customer, this is a good direction, he said. The idea is that at least 30 percent gross insurance premium was allocated to benefits and compensation.

– I agree that the direction is good, and I would very much like bancassurance (sale of insurance through banking channels – ed.) to fill the insurance gap, but I am afraid that it will not happen when I look at what it is like and what is the sales volume in the bancassurance channel – said Agnieszka Wachnicka, vice-president of the Polish Bank Association.

She added that the public often misses the fact that Recommendation U only applies to the distribution of insurance using the banking channel and through credit unions, and this is not the dominant channel. Therefore, standards should also be raised in other areas. In this context, the vice-president of the Polish Bank Association also drew attention to the problem of economic education of society.

– Perhaps we should strive to make certain categories of insurance mandatory, she said.

– The success of Recommendation U is that we have seriously started a dialogue about customer value, which has been neglected so far – said Krystian Wiercioch, vice-chairman of the Polish Financial Supervision Authority, which prepared the amendment to Recommendation U.

Referring to the issue of education, Krystian Wiercioch pointed out that insurance is a very complicated product and customers should not be expected to understand the detailed terms and conditions, but should be educated about what insurance is and what it is for. The role of insurance companies is to prepare products that will intuitively cover the risks they should contain.

The Vice-Chairman of the Polish Financial Supervision Authority also addressed the question whether the regulation would change the offer of insurance products in banks.

– It depends on the bank and the insurance company. It doesn't depend on regulation. The regulation shows a framework, but these frameworks must be filled by entities – banks, insurance companies – he explained.

The insurer's perspective was presented by Paweł Pytel, vice-president of the management board of TU Allianz Życie Polska, referring to the 30 percent level. minimum product value for the customer.

– Most insurance companies and banks will comply with this (requirement – ​​editor), but probably not with the entire range of products. In the short term, some products will probably disappear, but the quality of the remaining products will be higher, he said.

He also predicted how Recommendation U would affect the premiums for customers.

– I think that the entire market will shift towards offering more benefits to the customer, and the premium will remain at a similar level. And this will be a benefit that customers will only experience when the benefit is paid, explained Paweł Pytel.

– In the short term, there will be some shock and we will experience it soon, but in the long term, this regulation will probably increase the level of awareness and product quality in the coming years, he concluded.

The vice-president of the Polish Bank Association also talked about possible changes. As she indicated, the offer will certainly be rebuilt, but it will be an evolution rather than a revolution. There will be temporary turbulence, but the sector is able to prepare for it.

– How the CPI insurance market will develop will be closely related to how the credit market will develop – she added, recalling that the sales of CPI products are cyclically linked to the sales of housing and consumer loans.

– The bancassurance market has a very positive outlook and I believe that it will continue to develop dynamically – emphasized Agnieszka Wachnicka.

Grzegorz Jurczyk also talked about future forecasts.

– One thing is certain: the customer will benefit from the change and the standards of insurance products will certainly improve. Large products, such as life insurance, will certainly defend themselves. They are large scale and have a large revenue volume, which gives room for the development of systems supporting this type of insurance. However, when it comes to smaller products, we have significant concerns that some may not be a priority or even disappear. I think that many banks will reconsider their insurance offer. This is the moment when you can do it – summed up the CEO of BNP Paribas Cardif in Poland.


Luc's expertise lies in assisting students from a myriad of disciplines to refine and enhance their thesis work with clarity and impact. His methodical approach and the knack for simplifying complex information make him an invaluable ally for any thesis writer.