Ms Sandra Lodewijckx
Partner, Member of Board of Directors

Sandra is a partner at Lydian, leading both the Insurance and Reinsurance team within the Commercial and Dispute Resolution practices.

With extensive experience in insurance law, liability issues, pensions law, and litigation, she advises Belgian and international clients, including insurance companies, professional organizations, and intermediaries.

Sandra combines a legal background with six years of experience at ING Insurance, offering a unique perspective on the sector’s challenges.

Her expertise spans insurance distribution, regulatory matters, reinsurance, and corporate governance. Recognized as a leader in her field, she is ranked in the “Hall of Fame” by Legal 500 and has been instrumental in the firm’s Tier 1 ranking in insurance law.

Sandra is an engaging speaker and lecturer, regularly contributing to the academic and professional insurance community.

Mr Hugo Keulers
Partner

Hugo is a partner at Lydian, heading the Insurance and Reinsurance team within the Commercial and Dispute Resolution practices.

With over 30 years of experience in commercial law and litigation, he specializes in complex liability and insurance claims, including all-risk property, construction, BI insurance, D&O, professional indemnity, and product liability insurance.

Hugo is a trusted adviser to international and Belgian insurers, reinsurers, brokers, and law firms and is recognized as one of the top 10 Thought Leaders in Litigation in Belgium by Who’s Who Legal.

He has been involved in many of the largest insurance disputes in Belgium and regularly handles arbitration and mediation cases.

Hugo’s expertise, along with Sandra Lodewijckx, has contributed to Lydian’s Tier 1 ranking in insurance law.

He is a sought-after speaker and author on insurance topics and holds numerous professional distinctions, including being ranked in the “Hall of Fame” by Legal 500.

Belgian (re)insurance industry overview and outlook

1. The Belgian insurance sector – bird’s eye view

By way of reminder, the legislative framework on insurance matters in Belgium consists mainly of the 2014 Insurance Act, aka the law of 4 April 2014 on insurance, which governs, among others, the activity of (re)insurance distribution and implements the EU’s Insurance Distribution Directive (IDD). The authorisation and supervision of (re)insurance undertakings is governed by the lnsurance Supervision Act (aka the ‘Solvency II law’), i.e. the law of 13 March 2016 on the statute and supervision of insurance and reinsurance undertakings, which implements the Solvency II Directive. Additional laws and implementing decrees govern specific aspects of insurance legislation, coupled with regulatory guidance according to the so-called ‘Twin Peaks’ model by, on the one hand, the national competent authority for prudential supervision, the National Bank of Belgium (NBB), and the national competent authority for supervision of (re)insurance distribution, the Financial Services and Markets Authority (FSMA), on the other.

Established, traditional insurers continue to fill an important position on the Belgian market, generally regarded as conservative and characterized by steady, stable growth. In its most recent 2024 annual report (with comparative data relating to 2023 and 2022), the Belgian federation of insurance undertakings Assuralia notes an increase in overall premium collections by 5.3 %, for a total of € 32.1 billion, at the end of 2023. Notable changes occurred in the collection of individual life insurance with guaranteed interest, known as branch 21 policies, which increased by 5.7 % to € 6.3 billion in 2023. This confirms the previous year’s upward trend, when an increase of 4.8 % to € 6.0 billion was recorded. Consumers are opting for security, leading to a decline in collections for branch 23 individual life insurance policies, which are linked to investment funds and thus carry greater inherent risk: these show a sharp 16.3 % decline in 2023, reaching € 2.8 billion, for the second year in a row after a temporary rebound in 2021. In 2022, a 10 % decline was recorded and premium collections amounted to € 3.4 billion. On average, the life segment still noted an overall 1.9 % increase (compared to a decline of -0.4 % in 2022). The non-life segment showed a steady growth of 9.1 %.

Despite this rather traditional mindset, insurers and distributors who are able to concentrate on new products to cater for new needs associated with e.g. climate change, pandemics and cyber risks, are more likely to be successful in the long run.

2. Key issues and recent developments

Throughout recent years, the heightened intensity and frequency of natural disasters has been a topic of heated debate: 156,000 claims were filed in 2019, together accounting for € 337 million in storm and flood damage; this rose to 185,000 claims in 2020 for € 368 million in damages. In 2021, a year marked by catastrophic floods in Belgium, those damages reached an unprecedented peak, with 158,000 claims amounting to € 2.8 billion in damages. In 2022, again 231,000 claims were noted for over € 650 million in damages. This amounts to an increase in the number of claims by 49 % and an increase in damages by 93 % in the period 2019-2022. In addition to storms and floods, drought also caused a lot of damage in this period. In consequence, both insurers and reinsurers fully take this into account in their models and pricing. Under the current regime, natural disasters as in 2021 threaten to become insufficiently insurable, or even uninsurable. Full coverage by insurance companies is not feasible due to prudential reasons and the need to keep premiums affordable. A new law to increase coverage of natural disasters was introduced end of December 2023, raising the applicable intervention ceiling per insurer (which caps the total amount a given insurer will have to disburse further to a natural catastrophe) more than fourfold. Despite this amendment of the 2014 Insurance Act, coverage remains limited; insurers have repeatedly pointed out that full coverage is only achievable via public-private partnerships. Discussions on how to close this so-called ‘NatCat protection gap’ are ongoing, but the insurance sector initially voiced its regret that the recent legislative change only related to an increase of coverage without addressing the role of the public authorities.

Following Brexit, Belgium (and Brussels in particular) has also become a hub for UK insurance undertakings, notably Lloyd’s of London, to continue to service their EEA clients. As of the end of the Brexit transition period on January 1st, 2021, UK insurance undertakings and intermediaries can no longer rely on the European passport mechanism to provide their (re)insurance services across the EU either on the basis of the freedom to provide services or by establishing local branches. Many underwriters therefore had to discontinue their activities in Belgium. The ‘Brexit Act’ of 3 April 2019 on the withdrawal of the UK from the EU introduced a new category of insurance intermediary by amending the 2014 Insurance Act: the ‘mandated underwriter’ (aka the ‘Managing General Agent’ or MGA), defined as an insurance intermediary who, acting on behalf of one (or more) insurance undertaking(s), has the authority to accept the coverage of risks in the name and on behalf of the latter and to underwrite and manage insurance agreements. In order to position Belgium as an attractive insurance marketplace post- Brexit, the legislator decided to formally regulate this type of insurance intermediary, creating greater transparency on the activities of underwriting agents. Lloyd’s Brussels has since become an established feature on the Belgian market and meets a growing demand for specialist insurance products, providing its EEA partners with access to expert underwriters licensed to provide tailored (re) insurance solutions for a variety of non-life risks including Liability, Property, MAT, Cyber and Political and Credit insurance, and offering corporate clients and stakeholders certainty and continuity despite Brexit.

Furthermore, we have seen a steady growth in run-off transactions on the Belgian market. We expect that the growth of this market of specialised run-off service providers (risk carriers, service companies, consultants) will continue.

The compliance function has definitely taken on a more important role lately, with insurers devoting increasing attention to the evolution of the applicable regulatory framework to ensure proper identification and assessment of non-compliance risks. Compliance has also become synonymous with regulatory burden, with successive waves of additional reporting obligations being introduced through new and complex, often directly applicable, European legislation. Notably the Digital Operational Resilience Act (DORA, Regulation (EU) 2022/2554), which entered into force on 17 January 2025, imposes many new measures aiming for a harmonized cybersecurity framework across all financial sector undertakings. DORA demands a considerable investment of time, effort and resources, adding to the compliance burden already imposed by legislation such as the Corporate Sustainability Reporting Directive (CSRD), the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation. The European Commission has recently announced measures to simplify regulatory requirements and lower the exemption threshold for many of these obligations, however.

Despite Belgium being a rather conservative market, digitisation and innovative InsurTech solutions – coupled with the accelerating introduction of AI – are steadily gaining traction, mainly aiming to make insurance more accessible and consumer-friendly. The insurance sector cannot afford to ignore the growing influence of artificial intelligence. Overall, the implementation of AI is taking place gradually, i.e. in an evolution rather than a revolution. However, the advent of Chat GPT suddenly made the presence of AI very palpable. The sector firmly recognises the potential of AI to optimise processes, provide customer-centric solutions and increase overall efficiency, while keeping the human factor and customer relationships at its core. We see AI being deployed to streamline processes such as fast claims handling, optimisation of underwriting procedures and improving risk models. Nevertheless, there remains a strongly-held belief in intermediaries in the Belgian insurance landscape, who are making use of AI-driven FinTech tools to serve customers. These tools support intermediaries, without taking over their tasks. However, the crucial singularity moment when AI can completely lift the administrative burden for customers is still some ways off.

The advent of AI raises important questions around liability and responsibility. One key issue is the European regulatory framework, imposing strict rules on the clarification of the parameters used to arrive at AI-generated results. In addition, what is legal in one country may be illegal in another. This highlights the continuing need for human involvement and guidance in the use of AI. In the entire financial sector, trust is of crucial importance. Trust is easy to lose, yet hard to win back. Data and its gathering, treatment and analysis is another element fast increasing in importance. AI is increasingly being used as a tool to process the mass of data coming in. Here too, the question arises as to how far an insurer can go in using AI to refine selection criteria and determine insurability? Finding a balance between personalised services and maintaining solidarity and accessibility to insurance is a crucial challenge facing the sector. The ethical question arises as to what extent a company can implement AI models and auxiliary tools. Installing an ethics officer, along the lines of a DPO, could eventually become necessary in this regard.

Nevertheless, there are opportunities to use AI for prevention, especially in the field of natural disasters (NatCat): predictive models and combined analysis of public data and own claims history could allow insurers to assess risks more accurately and suggest preventive measures, possibly linked to insurance premiums. Data sharing can lead to greater collaboration, including with government agencies. It is essential to have quick access to disaster information, so that preventive actions can be deployed rapidly.

The 2008 global financial crisis and a number of financial scandals put the spotlight on directors’ liability, exacerbated by the more recent Covid-19 crisis that led (and still leads) to an uptick in bankruptcies, involving potential D&O litigation if mismanagement can be claimed as a contributing factor. It follows from Belgian legal doctrine and case law that the majority of liability claims against directors relate to insolvency. Associated risks have grown due to new regulations that impose more complex responsibilities on directors. All this has led to a steady growth in the uptake of D&O insurance, across all major industries but above all by listed companies and financial institutions, although there is a rising trend in middle-market uptake by SMEs as well.

A major development liable to affect the claims landscape is the new Civil Code being progressively brought in to replace the Napoleonic ‘old’ Civil Code going back to 1804. The revised provisions regarding contract law, set out in Book 5 of the new Code, entered into force on January 1st, 2023. Particularly the new Book 6 governing extracontractual liability, which entered into force on January 1st, 2025, is likely to have an impact on the conduct of claims down the line; it significantly reforms the country’s tort liability regime.

Another key legal development is the ongoing vast overhaul of the Belgian Criminal Code. The new Code will eventually replace the outdated Criminal Code, which goes back to 1867. Some of the reforms being introduced could also have an impact on directors’ criminal liability (and hence on D&O insurance policies down the line), but this will only become clear once the new rules take effect.

Due to the new obligations for companies to report on their Environmental, Social and Governance (ESG) measures, environmental considerations have become more important to companies. Directors who fail to comply with this reporting obligation may be sanctioned with private damage actions or administrative sanctions. Note that these will not always be insured under D&O insurance policies.

3. What is on the horizon for the insur­ance sector

After many trials and tribulations, the formation of a new Belgian federal government was finally agreed by the negotiating parties last 31 January 2025. The freshly issued policy statement and Coalition Agreement 2025-2029, totalling just over 200 pages, outlines the main policy choices and intended measures. These are manifold and far-reaching, such as a tax reform aimed at increasing the competitiveness of the economy, a thorough overhaul of labour policies and unemployment regulations, a pensions reform, a forceful and effective competition policy and furthering sustainability. A cursory reading reveals a number of focus areas for the insurance sector.

First and foremost, in consultation with regional authorities, a clear legal framework for natural catastrophe (NatCat) insurance will be developed, preferably via a synergistic public-private partnership, to regulate the liability and coverage of the various stakeholders. This must ensure that premiums remain stable, that risks are spread, and provide clear procedures and deadlines for effective and timely compensation, all without jeopardizing the sector’s financial stability. Pending this, insurers must fulfil their legal obligations. In a recent press release, insurance federation Assuralia enthusiastically welcomed the government’s stated aim to provide a distinct legal framework for protection against natural disasters, something the sector has been urging ever since the catastrophic floods of 2021.

The recent law of 17 March 2024 on terms and sanctions regarding insurance benefits greatly simplified and harmonized the rules for terminating an insurance policy and switching to another insurer, as well as the terms for the payout of claims. These provisions will be the subject of further evaluation and simplification, in consultation with the supervisory authority FSMA. The aim consists in stimulating competition while guaranteeing continuity of coverage; for simple risks, contracts could be standardised to a certain extent.

The government also intends to conduct an investigation into the impact of the various insurance intermediaries on general market forces and the price level of insurance products compared to neighbouring countries; the results will inform potential follow-up measures.

The ‘right to be forgotten’ was already the subject of successive amendments to the 2014 Insurance Act in recent years. The law of 30 October 2022 extended this right to allow people who have been declared cured of cancer for at least 8 years (5 years for young patients diagnosed before the age of 21) to take out outstanding balance or guaranteed income insurance. This will be broadened even further, with new disorders to be included. In this regard, a bill extending the right to be forgotten to all types of travel cancellation insurance and lifting the disclosure obligation entirely 5 years after completion of a successful treatment was recently voted through.

Other measures impacting the financial sector as a whole include facilitating equity investments for certain types of institutional investors (e.g. pension funds, insurers, etc.) to promote investment in the real economy, strengthening supplementary pensions (second pillar) through fiscal stability, the fight against cybercrime, the ongoing digitalisation and sustainable finance.

These objectives announced by the incoming administration to a large extent address the main concerns and social developments prioritized by the insurance sector, as set out in the political memorandum issued by insurance federation Assuralia in the run-up to the coalition negotiations: coverage in the event of natural disasters, pensions and health care and the transition to a more sustainable society, with digitalisation and new technologies as an underlying theme throughout.