Europe faces a widening pension gap, rising fiscal pressures and an urgent need for private investment.
One of the EU's key responses is the Savings and Investments Union, designed to shift citizens from saving to investing.
Yet insurers - while not excluded - are notably not explicitly included in the initiative. Zurich CEO for EMEA & bank distribution Alison Martin, who will take up the role of CEO Life, Health and Bank Distribution in 2026, calls this an anomaly the industry must address by proving it can deliver simple, low-cost and consumer-friendly investment products.
She argues that better advice, greater transparency and continued innovation could unlock billions in household capital, but only if the regulatory playing field allows it.
Insurance Asset Risk: How do you see the needs of European customers evolving in the areas of savings and investments?
Alison Martin: If we step back and think about the challenge that is trying to be addressed with the EU's Savings and Investments Union plan (SIU), it's the fact that Europeans save rather than invest.
There're a few reasons for that. One is that customers have a perception, and a lot of this relates to perception issues, that if you save or if you've got a bank deposit account, then your money is available instantly. And there's a perception that if you 'invest' your money is locked up – that it is a long-term product and it is not designed for you to take your money out.
That's a misnomer, but certainly, many years ago, some products were designed in a way that kind of produced that perception as an outcome.
For example, one of the things we did in Zurich Ireland was to offer products without exit penalties, so people can treat the investment more as a savings product, where it doesn't matter if you need to take your money out.
Think about it, what happens when someone simply leaves their money in a deposit account, particularly during periods of inflation? It means they're losing money in real terms.
This ties into the issue of financial literacy - many people don't fully understand that this is the case.
There's real value for customers in investing in financial markets, where they have the opportunity to earn returns above inflation and make their money work harder for them.
As an industry - whether that's insurance, asset management, or banking - we haven't done a great job of getting that message across. If we go back to the core customer need, this is where differences in how products are advised become important. Customers often need advice, but the question is how to make that advice accessible, affordable, and clearly labelled - so customers know whether they're being shown a full range of options or not.
It's unrealistic to expect every customer to fully understand their financial situation or to make highly informed decisions that align with their personal risk appetite. That assumption relies on a level of financial literacy that simply isn't there.
Looking at North America, where consumers invest far more and save less than their EU counterparts, would it be fair to say that there's a cultural aspect to financial literacy as well?
I'm not sure whether Americans are necessarily more financially literate - we'd have to look at the data to know for sure, and otherwise it's just anecdotal. But the reality is that the lack of a strong social security safety net in the US means people have no choice: they have to invest their money somewhere.
There's also a well-established system in place, through employers and insurers, that supports this behaviour. The 401(k) plan – a tax-advantaged retirement savings plan sponsored by many employers in the US - is a great example: it provides people with a clear and accessible way to start investing for retirement. It's a well-understood and widely adopted model in the US.
In Europe, the situation is very different. The social safety nets are much stronger, so many people feel they don't need to save for retirement at all, they assume the government will provide. But if we look at current government priorities - whether it's national security, defence, or other growing expenditures - it's hard to see how that model will remain sustainable. With ageing populations and rising healthcare costs later in life, the maths simply doesn't add up.
That brings us to the SIU, a huge file with many different aspects – and before we dive in, at a broader level, do you think it goes in the right direction to address some of the things we've just touched on?
Yes, it is a really important step for Europe. It would help focus attention on the need for European citizens to increase their levels of personal investment. If this can be made simple for people to access and understand, that would make a huge difference. And let's face it - while products should be able to stand on their own without tax incentives, tax advantages always help to generate consumer interest and enthusiasm.
Now, would I prefer that insurance was more explicitly included in this initiative? Yes - of course I would. It would be surprising if I said otherwise. But I'd also note that we haven't been excluded either.
Insurance products, particularly through the unit-linked products we offer, already make up one of the largest parts of the European investment market today. The challenge for us now is to show how the products we already have - or could offer - can meet the objectives of the SIU.
That means demonstrating that our products can be simple, low-cost, and flexible - which are all key aims of the initiative. I believe we can do that. In fact, Ireland is a great example where we've already made great progress on these aims.
So why isn't insurance explicitly included?
There's a perception that our products are complicated, possibly expensive, and may have a longer duration profile than what the Commission had in mind for the SIU.
I would refute that, but perception is perception. Are our products complicated? It depends.
For some, clearly, the SIU is quite straightforward: it's about giving people access to ETFs or mutual funds through a digital platform, perhaps with a tax advantage, and letting them learn to invest as they go.
To me, that's not a particularly thoughtful approach. Maybe that approach would work if everyone had a very high level of financial literacy - but that's just not the reality.
For some people, that may be fine, especially if they have a good understanding of their risk tolerance and are only investing a small portion of their income. But for most people, I believe it's better to have some level of advice.
It's not just about providing an investment product that matches someone's risk appetite. Advice allows for a broader conversation, for example, about whether a customer also needs protection products. By adding cost-effective protection riders, a customer can build not only an investment aligned with their risk profile, but also coverage such as life insurance, income protection, or critical illness - depending on their role in the household's financial situation.
I do recognise that some in Europe are uncomfortable with the way insurance advice is remunerated.
They support the advice model itself but not always how it's paid for. As an industry, we have to address that - to find remuneration structures that are transparent and acceptable. There should be no hidden fees, excessive commissions, or non-monetary inducements. If we get that right, we can build confidence that advice is being provided solely in the customer's best interest.
Beyond transparency, what else is needed to make the 'advice model' more palatable?
There's a spectrum when it comes to how advice and distribution models work across Europe. This really ties into the Retail Investment Strategy, a file that is progressing but not fully concluded.
Our position has been: why not just replicate the Irish model for commissions? In Ireland, commissions are transparent , and advisers clearly state the extent of their independence - something customers need to understand.
When the European Commission proposed banning all inducements, we raised concerns - because banning inducements altogether effectively bans advice. No one can provide it for free.
What's needed is a balanced model that recognises different forms of distribution - independent advisers, tied agents, banks, or employers - while ensuring customers receive good, value-for-money advice supported by the right tools.
AI can help make advice more efficient and empower customers to take greater ownership of their finances.
However, we can't jump overnight from a world where only 20% of people have good financial literacy to one where everyone is expected to manage their finances entirely on their own. The real challenge is: how do we bring people along on that journey?
So going back to the SIU and the products insurers could offer within that, in a simplistic way: what would insurers offer as an alternative to the ETFs you just mentioned?
Insurance-based investment products (IBIPs) are already the largest asset class, so they naturally make the most sense in this context.
Within that category, most of these products are unit-linked.
Now, there are products that become more complex by incorporating guarantees. However, because of those guarantees, such products typically come with exit penalties. That's unavoidable - you can't offer a guarantee without securing the cash flows that underpin it. And that feature runs counter to what the SIU is trying to promote, which is simplicity and easy access or withdrawal.
So, the focus would need to remain on the simpler end of IBIPs - namely, the unit-linked products. That doesn't mean they're limited in scope, though. You can still offer a wide range of underlying asset classes - equities, fixed income, real estate, and so on - while tailoring the mix to match a customer's individual risk appetite and investment objectives. We should also take this opportunity to be innovative, and look at designing new products to fit the SIU ambitions.
The commission announced last week (20 November) updated rules for occupational pensions, personal pensions and introduction of a prudent person principle – what did you make of what was announced?
We're very happy to see more focus on pensions. As a provider - whether in occupational schemes or through the various pension pillars (Pillar II, Pillar III) - anything that raises awareness around retirement saving is extremely positive.
Take auto-enrolment, for example. It's been a real success story in the UK - and although the UK is no longer in the EU, the model has worked very well. Ireland will become the next EU country to implement auto-enrolment, effective from 1 January next year.
Even before launch, the lead-up to auto-enrolment has already created a huge amount of awareness in the market about the importance of offering pension plans for employees. We've seen a significant increase in our pension business as employers start to think about their options: "Do I want to set up an auto-enrolment plan, or would I prefer a private pension plan?" Once they realise that if they don't choose, they'll be automatically enrolled anyway, they begin to take a more active interest - which is a fantastic outcome from an awareness perspective.
So yes, we're big supporters of that initiative.
As for the PEPP, I'll admit I'm not across every single detail of the latest proposals, but it does seem that they're introducing a bit more flexibility - for example, allowing providers not to have to offer every single feature from the start, which is helpful.
The key, though, will be how these frameworks are implemented at the member-state level. With many pieces of European legislation, the real impact depends on national execution. We write business in local markets, not at a European level, so what matters to us is how each country actually enacts the rules in practice.
If you think about how long auto-enrolment has been discussed - more than ten years, really - and now finally another EU27 market is about to go live, that sends a very important signal. Combined with the growing endorsement of pension dashboards, it's a development that will be hugely beneficial for citizens across Europe.
Ultimately will it address the European pension gap? Or that should be addressed via further regulation?
Ultimately, it's going to require governments to be more transparent with their citizens about the reality of what they can afford when it comes to state pensions in the future.
They really have two main choices. They can either significantly increase retirement ages, so that the available funds are spread across fewer pensioners, or they can be upfront and say: 'Your state pension is likely to replace only 30/40% of your current income.'
Then the question becomes - is that enough? And if not, governments should point citizens toward the tools that can help close that gap: for example, auto-enrolment through employers, and/or private pension options.
People need to understand these choices and take ownership of them - but that conversation has to start with governments being honest about the limitations of the current system. That's not an easy conversation to have with a voting population, and it will take real political courage to do it.
As the SIU aims to make investment more retail-accessible, how do you see competition evolving between insurers, banks, and fintech platforms?
We have to encourage each other to be better. There will always be competition, and that's a good thing. Competition is healthy; it drives innovation, reduces costs, and ultimately benefits consumers.
So no, I'm not threatened by competition. What I do want, though, is a level playing field. That means making sure we're not excluded from initiatives like this, and that our products receive fair tax treatment and incentives.
As long as the playing field is levelled, then it's on us to show that we're cost-competitive, that we offer something distinct and valuable to customers - whether that's through advice or through the added value of the insurance wrapper, including protection benefits.
That's our responsibility, and our opportunity.
Do you believe the SIU agenda complements or conflicts with Solvency II reforms?
How we invest our customers' money is driven by their individual risk appetite, whereas how we invest our own funds is determined by Solvency II.
The solvency and capital framework under which the European insurance industry operates should not place us at a competitive disadvantage compared to players from other jurisdictions entering our markets. I'm not threatened by having competition, I do want a level playing field.
We shouldn't be required to carry levels of prudence that go beyond what's necessary. That doesn't help the industry, and it doesn't help us attract the capital we need to grow within our markets.
What we need is a framework that's genuinely risk-based - one that ensures stability and confidence, but without unnecessary layers of prudence.
How could the SIU accelerate investment in the green and digital transitions?
I do believe there's a huge need in Europe for greater investment, whether it's in technology, infrastructure, or defence, or climate, the need is undeniable.
We need massive investment in green infrastructure and in strengthening the resilience of our existing systems.
And at the same time, the majority of European citizens' wealth is sitting in deposit accounts earning little or nothing. If we could redirect even a portion of that money into industries that genuinely need investment, we could transform Europe's competitiveness.
That said, we do need to be thoughtful about the risks. It wouldn't make sense for every European citizen to suddenly put all their savings into European defence stocks, for example. That's not an appropriate risk profile for most people. This is where I go back to the importance of advice.
We need to help people think through questions such as: how much should they invest in Europe versus globally? How should they think about sector selection or diversification? Are markets like the UK or Switzerland considered part of "Europe" for these purposes? And what kind of exposure makes sense outside of Europe?
But the fundamental premise stands: Europe does need more investment to strengthen its competitiveness. And with so much money sitting idle in deposits, the challenge - and the opportunity - is figuring out how to channel that capital productively and responsibly.
And finally, what would your advice to the insurance industry and your peers on tackling the perception that perhaps the insurance industry doesn't have a role to play there?
In a sense, the gauntlet has been thrown down to us by the fact that we are not explicitly included n in the SIU. We're not on the list, but we're not off it either - and that, to me, is a clear challenge.
The onus is now on us, as an industry, to prove that we can be innovative, that we can offer low-cost, high-value products, and that we have an important role to play in this space.
If we fail to demonstrate that, then frankly, that's on us.