FERMA advocates for revisions to EU Public Procurement Directives to improve ability of public-sector companies to purchase insurance
Lack of flexibility and administrative burden hampering public tenders for insurance and disincentivising insurer participation
Brussels, 12 March 2025 – FERMA has today published its Position Paper on the Revision of the EU Public Procurement Directives (PPD), in response to the European Commission’s public consultation, which proposes a series of policy options designed to introduce greater flexibility into tender processes for public-sector companies when purchasing insurance.
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In an increasingly volatile risk environment, the need for robust and comprehensive insurance solutions to bolster the resilience of public-sector entities is critical. However, FERMA believes that current PPD requirements relating to public tenders for insurance are too burdensome both on companies and insurers and lack the flexibility to secure coverage in an efficient and cost-effective manner.
Inefficiencies within the PPD
Current market inefficiencies created by the directives include the length of the procurement process which can take up to three months to complete. As policy renewal negotiations are usually conducted annually and primarily in Q4, this extended procurement period can mean insurers focus more on private sector opportunities rather than public tenders.
The PPD also places significant administrative requirements on both public-sector companies and insurers. Participation in public tenders requires insurers to produce extensive documentation as they must provide comprehensive data points as part of the European Single Procurement Document.
Further, FERMA believes that procurement processes lack the flexibility needed to operate in today’s dynamic insurance market. The complexities inherent in largescale insurance programmes and the need for multiple insurers to participate in a single risk are not adequately accommodated for in the PPD, particularly as the directives assume that each tender will have a single winner.
As a result, public-sector companies are often at a disadvantage when negotiating insurance cover exposing them to higher premiums compared to private companies, and the risk of not finding sufficient coverage.
Adapting the Public Procurement Directive
To address these inefficiencies and the lack of flexibility, FERMA advocates for revisions to the PPD and has called upon the European Commission to consider the following policy options:
- Adapting the PPD to introduce lighter requirements for insurance contracts. FERMA has identified several areas of possible regulatory improvement, although it believes this option does not solve the issues concerning the purchase of insurance.
- Excluding insurance policies from the scope of the PPD. This would align with the existing exclusions of loans and other financial products and would be compatible with the overall objectives of the PPD.
- Allowing ex post reporting on the purchase of insurance policies. This would provide a greater degree of transparency while giving public-sector companies the flexibility they require. However, this option would nonetheless represent an additional administrative burden compared to an exclusion.
Commenting on the proposed revisions, Typhaine Beaupérin, CEO, FERMA, said: “FERMA recognises the need for a robust and effective EU procurement processes. However, as it currently exists, the PPD acts as a significant drag on the ability of public-sector companies to secure comprehensive coverage at a price in line with private companies. Further, the requirements disincentivise insurers from participating in public tenders which is detrimental to the resilience and competitiveness of the EU. We therefore urge the European Commission to consider reducing the administrative burden it applies, excluding insurance policies from the scope of the directives, or allowing ex post reporting to enable greater purchasing flexibility.”