Luxembourg ranks among the three countries in continental Europe, along with Switzerland and the Netherlands, whose laws make it easiest for multinationals to avoid paying tax, giving big groups an unfair advantage over rivals with fewer resources, according to pressure group Tax Justice Network. Spokesman Luke Holland and Luxembourg group member Jean-Sébastien Zippert acknowledge that the grand duchy has taken steps to curb tax avoidance, but multinationals continue to exploit tax loopholes unavailable to smaller businesses, which country-by-country tax reporting is needed to curb. They argue that it is a risk for Luxembourg's economy to be too dependent on financial services, saying it limits the country's ability to take independent decisions.

Low interest rates pushed the average yield of German traditional life insurance policies to 2.14% last year, down from 2.29% in 2019, according to Assekurata. The rating agency finds that only 25 of 47 insurers surveyed still offer the guaranteed policies, and they accounted for just 14% of new sales. It describes traditional policies as obsolete, with the market now dominated by products with higher profit potential but increasingly no or only partial guarantees. The study also estimates that German life insurers had to set aside around €11bn for the country’s additional interest reserve last year, up from €9.5bn in 2019.

Newly-disclosed documents from 2007 appear to implicate Garth Ritchie, Deutsche Bank's former head of investment banking until his departure in 2019, in cum-ex trades being investigated by Cologne prosecutors. An internal expert report from 2007 explained that German tax authorities would make a refund for dividend taxes that were never paid, enabling the bank to profit without any risk, and Ritchie was subsequently reported to have endorsed the strategy. He is one of about 70 former Deutsche executives on the list of possible defendants in the cases, which involve fraudulent tax refunds arising from share trades around the dividend payment date.

Analysis of the Panama Papers has enabled tax authorities in Germany to recover €72m in unpaid tax and penalties to date, according to Hesse finance minister Michael Boddenberg. He says the leaked documents led to the recovery of more than €38.4m in additional tax and €19m from criminal cases, as well as a further €14.6m thanks to data sent abroad. Overall, the documents have prompted or supported around 155 criminal cases across Germany. Hesse’s tax authority was responsible for analysis of the around one million files involving some 3,000 shell companies and 1,000 individuals, along with the federal criminal police office.

Marc Hengen, managing director of Luxembourg insurance industry body ACA, says that it has met Finance Ministry officials to discuss ways of insuring against the risk posed by pandemics, which are not currently covered by policies in the grand duchy. Insurance coverage of business risks in Luxembourg currently encompasses fire, storms and water damage, but not illnesses or closure by administrative orders. The ACA has created a working group to address the issue of health-related risks, but Hengen says purely private insurance coverage, including lockdown measures, is currently unfeasible given companies' level of resources. The group is assessing the French system of compensation for natural disasters, in which responsibility is shared between insurers, the state and an industry solidarity fund.

The outlook for French life insurers this year is worsening because the negative impact of the Covid-19 pandemic is expected to be more pronounced than in 2020, mainly due to interest rates being kept lower for longer, according to Fitch. The rating agency sees low rates adding to the pressure on life insurers' earnings, capitalisation and the long-term sustainability of traditional business models. It says the pandemic has obliged insurers to accelerate their multi-year transition to a capital-light model, despite intense competition and French savers’ risk aversion, and expects the trend toward reduced sales of traditional policies to continue while unit-linked business remains resilient.