WEALINS is an company with experience and pan-European know-how in the development of cross-border solutions, present in nine European markets. Celebrating almost 30 years of history, and being a leading player within the life insurance sector in Luxembourg, how do you describe its evolution in the sector? What features does it have that differentiate it from the rest?
The evolution of WEALINS in the insurance sector has been very positive and we can tell a success story. In recent years, the company has been increasing its share in the various markets where it is present, including being the market leader in some of them. Although 2020 was an atypical year, marked by the COVID-19 crisis, WEALINS registered growth of almost 70% compared to 2019, with a production of 1.7 billion euros. And I can say that 2021 is being a very positive year too. WEALINS has several characteristics that differentiate it from the rest, but I believe that the most important are the fact that we belong to a solid group with a unique DNA, which exists for almost 100 years and a solvency ratio of over 200% – o Foyer Group -, and having as one of our pillars the maintenance of an excellent quality of service to our partners and clients as well as having flexibility and adaptability to changes and challenges in the sector.
WEALINS solutions are offered to clients residing in Belgium, Spain, Finland, France, Italy, Norway, Portugal, Sweden, and of course Luxembourg – where the head office is located. Focusing on Luxembourg, what is the importance of, regarding the quality of life of residents, enjoying political, economic, and social stability? What are the solutions and advantages WEALINS can offer as a Luxembourg pure player?
WEALINS is a company specialised in the development of tailor-made life insurance and capitalisation solutions on 9 European markets. We are a Luxembourgish pure-player mostly because we belong to Foyer Group, the first privately-owned group in Luxembourg, historical leader of the local insurance market since 1922, independent of any international financial institution. For WEALINS, the advantage is that it is a family, stable and independent shareholding. Generally speaking, Luxembourg is recognised for its exemplary political, economic and social stability (triple A rating, constant growth above the European average), a culture of stability that reassures investors. Furthermore, the Luxembourg life insurance contract as offered by WEALINS offers multiple advantages, including: the strongest policyholder protection regime in Europe (with the security triangle) in Europe, the access to a wide range of underlying assets and the tax neutrality.
It is a company that seeks to innovate its solutions without ever neglecting sustainability, thus adhering to the social and Corporate Responsibility (CSR) Strategy. As Luxembourg is a country oriented towards the future of innovation and sustainable finance, do you think that it is precisely these issues of innovation and sustainability that make WEALINS a leader in its sector? In what way?
We are attentive to the market trends and to the needs of our partners and their clients. Innovation and sustainable finance are indeed two trends that are attracting strong interest. Foyer Group and WEALINS have always adopted a CSR approach and employees are involved through dedicated working groups. Foyer Group has recently obtained the ESR (Socially Responsible Enterprise) label issued by the INDR (National Institute for Sustainable Development and Corporate Social Responsibility). Our next challenge in this area is to find ways to combine the ESG (Environmental, Social and Governance) preferences of our individual clients with a strong corporate conviction, as well as the development of ESG criteria.
As a company that focuses on an approach of exclusive partnerships and offering life insurance solutions, what are the biggest challenges you face when you are headquartered in a country like Luxembourg? With increasing competitiveness, what gaps remain to be filled to continue along the path that has been traced so far?
We are indeed operating from Luxembourg. Our teams are multilingual and multi-disciplinary, allowing us to capitalise on synergies of competences and expertise (financial, legal, wealth planning, commercial, sales support, back office) in all our markets. Our understanding of the specificities of each market in which we are active enables us to support each partner and their clients in the best possible way. We are recognised for our operational excellence and our partners acknowledge the responsiveness and professionalism of our teams. This is a real added value compared to our main competitors. We have developed a relationship of trust with our partners that allows us to understand and respond perfectly to their concerns. The year 2020 could have questioned this partnership approach with the Covid-19 crisis. In reality, we have been able to adapt quickly, for example by implementing new procedures and adopting new digital tools, in order to remain close to our partners. In times of uncertainty such as 2020, our partners have been able to turn to the companies they trust the most. We have thus had a record year in 2020 in terms of collected premium, notably because of the loyalty of our partners, as well as the flexibility and adaptability that we have shown. The challenge now (which we are taking up) is to maintain this quality of service on a daily basis.
Luxembourg is recognised as the 1st cross-border life insurance distribution in Europe. Thanks to the portability of contracts, WEALINS supports the client according to changes in their family environment and professional situation in various countries. How does it work in practice?
In fact, the service we offer to our partners and clients, includes supporting a client who, for professional, personal or family reasons, has to change his country of residence. And because of it, WEALINS works with an independent network of specialists to be sure our products are always in compliance with the legislation of the client’s new country of residence. This is known as the portability of the contract meaning that the Luxembourg life insurance contract can accompany the policyholder when he moves. In practice, whenever a client already has contracted a WEALINS solution and decides to change his tax residence, our range of services exactly covers the analysis of any necessary changes in the new jurisdiction, so that the contracted product maintains its classification as ” life insurance”, fully adapted as such to the law in force in that country, that is, with the necessary shielding to do so.
The company’s contracts have the particularity of easily adapting to the legal and tax restrictions applied in each country. Is all this flexibility that WEALINS offers that dictates the quality of its services, making it, of course, a center of excellence in cross-border insurance?
Correct. In addition to our internal product development teams that are always attentive to tax, legislative or other changes that exist either locally in the markets where we provide solutions, or at European level, we also work with legal and tax specialists who validate that all our products are always in accordance with the legislation applicable to the sector in which we operate.
After all, we cannot forget that life insurance is a long-term product and as WEALINS is an international company operating in Europe through the free provision of services, compliance with the law of all the solutions we provide is essential for our partners and clients.
It has a “Security Triangle” mechanism, which offers the client one of the most solid security frameworks in Europe. How does the company help in this regard? What are the procedures?
The prudential rules on life insurance in Luxembourg are a unique safety reference model in Europe. The supervision of the insurance sector is carried out by the Commissariat Aux Assurances (CAA), the Luxembourg insurance company regulatory authority.The policyholder of a Luxembourg life insurance contract benefits, thanks to the specific Luxembourg regulatory framework, of triple protection: segregation of underlying securities from other company assets; quarterly control by the CAA of the balance between technical provisions and underlying assets; the “Super-privilege” in the event of company default: the policyholder of a Luxembourg insurance policy is a privileged first-degree creditor of these assets. The “Security Triangle” mechanism is actually a tripartite convention between the insurance company, the bank and the regulator (CAA). Luxembourg companies must deposit the underlying securities with an authorized credit institution in accordance with the conditions established by the CAA. The deposit of titles can only be made after the signature and approval by the CAA of this tripartite agreement. The purpose of this tripartite agreement is threefold: firstly, it ensures that deposits of assets underlying technical provisions (Regulated Assets) are clearly segregated from the insurance company’s other assets (Free Assets), it also ensures that these assets are not encumbered by any security, pledge or lien other than that of the insured and if a company defaults, the CAA can block its accounts to protect the rights of policyholders.
What are the tax advantages that a life insurance company like WEALINS can offer?
Exactly the same as any existing life insurance in the countries where we are offering solutions. Although our insurance is provided by a Luxembourg company, WEALINS, it always respects the tax law, as well as the law applicable to the life insurance sector in the country where we sell it. For example, life insurance in Portugal may benefit from decreasing taxation according to the duration of the contract, provided for in the PIT Code (one or three-fifths of income are excluded from taxation, if redemption, advance, redemption or other form of anticipation of availability, as well as expiration, occur after the first five or eight years of the contract). Our life insurance contract dedicated to the Portuguese market (Wealins Life Portugal) benefits from exactly the same. Hence, it is important that all our insurances always comply with the law of the Client’s country of residence.
Why is it important for everyone to have a wealth insurance in a country like Luxembourg? What added value does WEALINS offer?
There are several reasons that lead a client to subscribe a life insurance contract in Luxembourg. However, I consider that the major ones are the security that the “Security Triangle” mechanism offers to investors, the fact that Luxembourg is one of the few countries in the world that still maintains a AAA rating, the possibility to be planned succession through a life insurance and of course the tax advantages that this product has. The life insurance policy is an instrument perfectly adapted to the needs of wealth and succession planning. For WEALINS, it is an instrument that allows policyholders to transmit their assets safely and in accordance with their wishes. Our added value is the know-how of nearly 30 years and our existence and experience in marketing and developing this type of solution, as well as the excellence of our service, recognized by our partners
Technology is fully rooted in the lives of people and companies. How relevant is it to go hand in hand with innovation and the digital transition in life insurance? What are the biggest changes the company has seen in this regard?
Innovation is at the heart of our development strategy, and part of our DNA. WEALINS teams are playing an active role in our digital transformation and actively participating in the various digitalization projects. The Covid-19 crisis in 2020 has been a real facilitator of the digital transformation within the wealth insurance industry. Nevertheless, we did not wait for the crisis to start our digital transformation, with the objective to meet the expectations of our partners and their clients who are looking for a more flexible digital offer. Our approach is to simplify the subscription process while taking into account the specific needs of each client for whom we develop tailor-made solutions.
Finally, what innovations and new projects are being designed for the future of an increasingly innovative sector? Is Luxembourg one step ahead of these trends?
Digitalisation will continue to play an important role in the coming years. At WEALINS we are currently working on the digitalisation (underwriting and all online operations) of our insurance contracts in all the markets in which we are active.