The cross-selling of insurance products and the insurance distribution directive

Abstract

The Consumer Trends Report issued by EIOPA reports constantly cross selling as an issue for consumers of the European Union insurance market since 2012. Expectations are reasonably high on regulatory initiatives addressed to counteract the negative impacts of these selling practices. Whilst cross-selling may confer benefits for customers in the form of (initial) cost savings or reduced search costs, it can also raise a number of problems in terms of consumer welfare. The paper intends to provide an overview of the cross selling practices observed in the EU Member States as well as the inconsistencies of the EU legal framework. Then, paper describes how the IDD will address the issues arising from the cross selling of insurance products.