Ulrike Mönnich is a partner in mbh-Attorneys-at-law. She has many years of experience and specialisation as a lawyer in insurance and reinsurance and liability law. Ulrike regularly advises national and international insurers, reinsurers, brokers and corporate policyholders in all insurance law issues and related matters (including liability law, contract law, supervisory law and compliance). She represents the interests of her clients out of court and in most types of court proceedings, including arbitration.
What inspired you to pursue a career in insurance law?
When I had finished law school and passed the bar exam, I had offers from different law firms – among which I took the offer of a major insurance law firm in Cologne to work as a defence lawyer. Defence work was a challenge and I took a great deal of satisfaction out of litigation. Sometime later I joined the insurance department of a major international law firm in Düsseldorf. This allowed me to gain ample experience in arbitration, supervisory law, insurance M&A (including portfolio transfers), structuring of insurance programmes, and various channels of distribution. My work became very international in both litigation and arbitration, as well as in supervisory law. I have always been inspired by the intellectual challenge posed by insurance, and during my career I have learned how broad it is and how quickly it moves forward. In particular, in the field of insurance supervisory law, back at that time creative solutions were sought after as a lot of practical questions were not dealt with by the literature nor by any guidance of the supervisory authorities. This is one of the reasons I also started publishing on the subject. I had the chance to participate in major German publications, such as the leading Handbook on Insurance Law as well as the leading Commentary on the Insurance Contract Act, and was given the opportunity to publish articles in major legal journals on insurance.
Following a period of parental leave, I moved to Zurich and joined a Swiss law firm as a partner, and I also started publishing on Swiss insurance law. I got invitations to participate in leading Swiss publications on insurance law, including a commentary on insurance contract law and on insurance supervisory law. Publishing on Swiss insurance law has been and still is challenging, as there are even fewer precedents than in Germany. In 2015 one of my colleagues and I decided to set up our own boutique law firm on insurance law, which we launched at the beginning of 2016 and which was joined a couple of months later by our third partner. Alongside my work in Swiss and, not least, Liechtenstein insurance law, I have kept on advising in German and European insurance law.
What do you enjoy most about working in the field of insurance law?
Insurance law, at first glance, appears to be a rather narrow field. However, it comprises a variety of components as a body consisting of public and private law. Further, it is – not only in the EU/EEA countries but to a certain degree even in Switzerland – strongly influenced by EU directives and regulations. To me it is quite interesting to track where Swiss law follows EU legislation and where it differentiates from the EU approach, and the consequent results in the daily business of insurance companies and brokers. I also like the international character of insurance law as it is practised in our firm. Due to the breadth of backgrounds in our team, we offer advice on Swiss, Liechtenstein, German, Austrian, English and EU insurance law as a one-stop firm, and I enjoy working in this type of environment. I enjoy advising our clients in “cross-border situations”, which may be very diverse: from litigation in international tort to coverage cases over trans-border M&A and the establishment of foreign branch offices in Switzerland for foreign insurers, to cross-border business in general, including the adaptation of insurance products to the legal and regulatory environment in other countries. This allows us to provide holistic and, at the same time, cost-effective advice on several jurisdictions. This is a big challenge and makes our work so colourful.
What are major legal challenges to be faced in the years to come?
Insurance markets and insurance law more specifically face important short, medium and long-term challenges. Digitalisation is one of the key words in this context but is by far not the only issue at stake. Insurance law must act as a sounding board for all these social and economic developments, in that it has to give adequate responses to new or changed circumstances.
The Swiss legislator, as well as the regulator, are reacting by adapting legal and regulatory rules to social and economic developments. A recently proposed reform to the Swiss insurance supervisory act intends to offer more flexibility to Swiss insurance companies. The reform intends to deregulate insurance business conducted with professional policyholders to a certain degree. This move may at the same time make Switzerland an even more attractive host for the establishments or subsidiaries of foreign insurers including UK insurers on Brexit’s eve. At the same time the reform intends to create an environment for the establishment of a Swiss insurtech hub by lowering regulatory demands for insurers offering innovative products.
But there is also a certain tendency to strengthen regulation. Most notably, life insurance products with elements of investment products such as funds or unit-linked policies will be subject to a regime which resembles several aspects and ideas of investment product regulation. Once enacted, Swiss insurers will have to very carefully adapt their products, and not least their distribution to the new legal and regulatory environment.
While dealing with these short or medium-term challenges, the long-term challenges must not be overlooked, from cyber-risks to climate change. A whole set of new and unprecedented questions are also being posed in relation to the insurance industry and the law governing it.
What opportunities and challenges do you think the rise of insurtech will bring for the traditional insurance market?
Insurtech, as I understand the term, is quite broad and very general. It refers to the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model. Insurtech is a combination of the words “insurance” and “technology”. The use of technology or digitalisation in the insurance industry as such is not a particularly new feature, which will be added to or replace the classical insurance business at the push of a button. It is rather an ongoing process that started years ago. I would even say that the implementation of EDP could be seen as the very beginning of digitalisation. Nonetheless, the traditional insurance industry has not yet made use of all digital solutions that are technically possible and that would make processes easier, smoother quicker and more cost-efficient for the satisfaction of customers and the entities. Just look at it from the customers’ point of view: wouldn’t it be convenient if you had everything you need around your insurance contract in just one app? No paper, less administrative costs, quicker claims settlement. This is just a very plain example as I want to keep it simple here. I think that, once the regulatory hurdles have been removed, digitised products will become a matter of course in the insurance market as future customers will expect to smoothly manage insurance contracts with one click, and not to communicate in writing. Insurance companies, including the more traditional players, will develop such technological solutions, or cooperate with specialised service providers or brokers offering such solutions, to remain competitive.
Insuretech solutions also promote so-called peer to peer (P2P) insurance models, where the insurance pool is comprised of friends and family members or individuals with similar interests. Such P2P models with friends and known individuals provide for full transparency to all members; a certain social control reduces moral hazards as there is a disincentive to file unnecessary claims to the disadvantage of friends. As funds not needed to pay claims during the ongoing insurance period are refunded to the members such P2P solutions could become very cost-efficient players. Subject to regulatory hurdles (that are currently being lowered by the Swiss legislater) P2P platforms could become new competitors to traditional insurance carriers. On the other hand such P2P platforms may also have the potential to become valuable cooperation partners of traditional insurance and reinsurance carriers.
Another obvious challenge for all players involving insurtech solutions is compliance with data protection law regulations.