Anthony Cauchi will soon be stepping down as president of the Insurance Association Malta. He looks back over the past two and a half years – and expresses his frustration with the lack of progress by the relevant authority in addressing certain issues… 

Anthony Cauchi had one clear message as the end of his tenure looms: the Insurance Association Malta has supported policy-makers in numerous ways over the years but there was very little concrete action from their side to show for it.

One of the most pressing sectors requiring action – sooner rather than later – is road safety. The Association has repeatedly written to the media about the changes required, met with politicians and authorities, conducted surveys and even organised a conference on the topic – all with very little achievement.

“Road safety has taken up a disproportionate amount of our attention because of the alarming statistics. We have been seeing the number of deaths increasing at a time when the per capita rate in the EU is decreasing. We have worked tirelessly to push for change, but little has been achieved.

“We all have a social obligation to try to reduce deaths and serious accidents as much as possible. These destroy families, affect livelihoods and have a big social impact,” he said.

“The Government has no option but to act. We all follow the media and news items and are well aware of what is happening on our roads.”

These accidents are costing the industry millions – which eventually force motor insurance premiums to rise – but he stressed that the association is approaching this not from a financial but a social perspective, trying to protect the safety of the general public, whether drivers, passengers or pedestrians.

“The Insurance Association Malta has been very proactive and has made concrete suggestions on random breathalyser tests, legislation for kick-scooters, and more,” he explained.

“For example, at a conference four years ago, we had got all stakeholders together and in addition to the presence of a reasonable suspicion before administering a breathalyser test, the law should also define those instances – such as serious accidents requiring the police presence – where a breathalyser and/or drug test becomes a mandatory requirement. Legislative changes had been discussed various times – up to ministerial level – and the suggestion was welcomed. But unfortunately, although we were promised that it would happen, it never did.”

The Government has made some important improvement – fines have been increased and a recent legal notice created clearer parameters for kick-scooters – but he lamented that this was not enough.

“There are more cars on the road – but not more enforcement to match. It leaves much to be desired!” he said, adding that the association would keep up the pressure for change.

The Association has also been pushing for a review of the various pieces of legislation which oversee fire and safety, especially given the increase in the number of present and future high-rise buildings.

“Current legislation is outdated and needs to reflect the new realities. Once again, we have provided constructive feedback, statistics and support from our experts. And we held numerous discussions but nothing has been achieved,” he said, once again showing his frustration at the lack of progress. “How many more years need to pass before something is finally done? Legislation needs to keep pace with the development taking place around us, and with the associated risks!”

Private pensions

Another issue that the Association has been lobbying for is incentives to boost the take up of private pensions, again something that has been discussed for years with the authorities and successive finance ministers.

“The standard of living has increased and with it so have expectations. The question is simple: how can that standard of living be sustained after retirement on a State pension alone? To ensure that their income is adequate when they retire, people need to start saving more now. Politicians cannot keep passing the buck from one legislature to the next.

“We have been advocating that the Government needs to invest seriously in pensions, incentivising private industry and voluntary private pensions. Savings decrease when high inflation bites and when the cost of properties increases. We are facing a situation where people will need to work longer after their retirement age just to be able to keep up with the cost of living. Surely by the time they reach retirement age, they should have earned the right to ease off!”

Cauchi said that this issue was by no means unique to Malta but whereas other countries had tackled the issue, finance ministers had shied away from taking action, whether on the private, third-pillar pensions, or on occupational pensions.

In the meantime, the Association has seen the sector grow and faces the same human resource pressure as other dynamic sectors. It currently employs some 2,500 people, while financial services – which includes the insurance sector – which according to the MFSA Annual Report for 2022, contributes 4.3% of Malta’s GVA.

Cauchi said that the Association believes one solution is to invest in education, to ensure a stream of qualified people are available to join the workforce. It has teamed up with the University of Malta and also with MCAST but, he said, pressure was being put on the sector to create its own courses.

“We are not in the industry of creating courses but of creating the workplace opportunities,” he said unequivocally.

Looking ahead, the insurance industry will need to have sufficient staff to cope with new legislation and regulation, as EU laws are transposed. The Association has a very constructive relationship with the regulator, the Malta Financial Services Authority, and has always welcomed regulation. However, it is concerned that some of the regulation in the pipeline – for example, the Recovery and Resolution Directive and the Motor Insurance Directive – does not take into account the size of the industry here and it has been lobbying for the element of proportionality to be guaranteed.

“Legislation must be commensurate with the size of the market. Appropriate documentation and information are, of course, important but we need to balance the requirements with the benefits for the consumer – which they ultimately pay for,” he stressed.

The Association is not only involved with local issues but participates at an international level, particularly through its membership of Insurance Europe. One challenging area of global concern is climate change, and Mr Cauchi is well aware that the insurance sector will need to take proactive action to support greener risks, rather than ones which are a liability to the environment.

“We should not just sit back! We are seeing freak storms and changing weather patterns, all of which has an impact on the way we live. As an industry, we organised a conference and got experts and stakeholders to provide statistics and information drawn from our experience as insurers. It is clear that we all need to take action.”

With the end of his term, Cauchi pledged that the Association would continue to lobby for concrete change, and would put emphasis on education and outreach to create more awareness about the industry.

He concluded by wishing all the best to his successor, Julian Mamo, who is currently the vice-president and to thank his fellow council members at the Association, as well as the supportive staff, and all the Association’s members for their “dedication and contributions to this important sector”.