Putting Behavioural Insights into Practice: Four Building Blocks for Conduct of Business Supervision (European Insurance and Occupational Pensions Authority)

Summary

• EIOPA issued a staff paper on 27 October 2026 introducing four building blocks to integrate behavioural science into conduct of business supervision.p.1
• Historically, only around a quarter of natural catastrophe (NatCat) losses in Europe have been insured, highlighting a significant protection gap.p.10
• Following a joint workshop with the European Supervisory Authorities in 2024, EIOPA organized a second workshop in 2026 focusing on supervision and policy integration.p.3
• The framework establishes four building blocks for supervisors, spanning outcome definition, behavioral analysis, multi-level interventions, and evidence gathering.p.4
• EIOPA issued a warning under Article 9(3) of the EIOPA Regulation to address non-compliance and detriment in credit protection insurance sold via banks.p.11
• The practical application of the four building blocks is illustrated through three specific case studies covering NatCat insurance, CPI, and IBIPs.p.9

Key insights

1. Behavioural insights are most valuable when integrated across the full supervisory cycle rather than used solely to refine pre-selected options.p.3
2. Conduct supervision should define success based on actual consumer financial health outcomes rather than relying on firm compliance as a proxy.p.5
3. Mandated disclosure and information availability alone often fail to enable effective consumer choices in complex financial decision contexts.p.5
4. Supervisors should view consumer behaviour as adaptive under context constraints rather than assuming it is inherently flawed or purely irrational.p.6
5. Interventions targeted exclusively at individual behaviour change are rarely sufficient on their own to achieve lasting positive consumer outcomes.p.7
6. Supervisors should evaluate multi-level policy mixes operating at market, product, and distribution levels simultaneously.p.7
7. Combining multiple research methods and data sources provides a more reliable evidence base than relying on any single methodology.p.8
8. Cross-selling credit protection insurance via banks leaves consumers vulnerable because they treat insurance as a secondary task to securing credit.p.11