Krystian Wiercioch, Deputy Chair of the KNF, took part in the debate ‘What is insurance?’, organised by the SGH Warsaw School of Economics as part of the Jubilee Conference celebrating the 30th anniversary of the Department of Social Insurance and 55 years of academic work of Prof. Tadeusz Szumlicz.

The speakers debated insurance in the context of definition, future, threats, education, and other related aspects. Krystian Wiercioch has said he sees insurance in terms of safety. For life insurance, premiums are often paid for decades up to the point when a benefit payment is made and are invested over that time so that they are sufficient to make the payment when an insured event occurs. It is essential that on the date of the compensation payment there exists a solvent entity to perform the payment obligation. This is why prudential requirements laid down in the legislation aim to ensure long-term solvency of insurance undertakings. 

The participants to the debate also discussed education in the field of insurance. Krystian Wiercioch has noted that when entering into insurance contracts, clients tend to focus on the price and choose the cheapest offer, which then leads to low quality of claim adjustment or a disappointing amount of compensation. Education in insurance should be oriented towards raising insurance awareness and teaching the habit of insuring your property, life or health so that the scope of insurance and the sum insured are appropriate to your needs. 

As regards the future and development of insurance, he has pointed out that at insurance conferences people talk a lot about insurance gap – what it is, how to measure it, what causes it – but what is missing is the actual implementation of ideas how to reduce it. 

Talking about the threats, Krystian Wiercioch has said that even though for the last 25 years the Polish market has seen no failure of an insurer, and insurers are demonstrating a good financial standing, the solvency of the sector and of each entity is something that we should be mindful of. What threatens stability are irresponsible actions of single entities which attempt to exploit the weaknesses of the existing system over a short term. 

He mentioned the historic issue of mis-selling and its consequences in the case of unit-linked insurance, as a lesson learned and a mistake to avoid.