Policy Issues

Swine flu  

The ABI has reassured consumers that pandemic illness, including swine flu, is covered by travel insurers who are members of the ABI. Nick Starling, the ABI’s Director of General Insurance and Health, said:  

“While the outbreak of swine flu is causing concern, people should not overreact or panic and travel insurance is there to help. Travel insurance will usually cover the cost if a holiday is cancelled because someone is too ill to travel. It will also cover the cost of medical treatment abroad and any associated delays caused by getting an illness on holiday.”  

People who are diagnosed with swine flu through the National Pandemic Flu Service will be able to use documentation received though it in order to validate insurance claims for cancelled holidays.  

Full details of the ABI’s information to consumers can be found here: 

Pensioner poverty  

The House of Commons Work and Pensions Committee issued a report highlighting the need to tackle pensioner poverty, calling for action in a variety of areas. The ABI agrees that more needs to be done to increase retirement income, in particular by promoting the need to save in a pension during people’s working lives. Responding to the report, the ABI said:  

"The Committee is right to highlight the urgent need to improve retirement income. As life expectancy increases, this problem will only get worse unless action is taken. Encouraging more people to save more for their retirement is essential, and the introduction of automatic enrolment into workplace pensions from 2012 should help. But we believe that automatic enrolment should be allowed before 2012 if employers want to offer it, and we urge the Government to make this happen."  

The report can be accessed from the Committee’s web site, here:   

Insurance fraud  

A new report from the ABI has shown that insurers are detecting ever-higher levels of insurance fraud. In 2008, fraud worth £730m were uncovered and prevented, a rise of 30% from 2007. And the industry estimates that the value of undetected fraud has risen to £1.9bn, up from £1.6bn two years ago. The ABI highlighted the risks of committing insurance fraud – as Nick Starling, the ABI’s Director of General Insurance and Health, said, “There is no hiding place for insurance cheats. Honest customers should not have to pay for the fraudsters. The tough approach taken by insurers to protect honest customers means that they are detecting more of the fraud committed. Closer scrutiny of proposal forms and claims, as well the exchange of information through industry-wide databases, is tightening the net on the cheats. Getting a criminal record, as well as difficulty in obtaining and more expensive insurance and credit problem await anyone who sees insurance as a soft touch.”

This sentiment was echoed in the media, with the Independent’s Simon Read writing on 18 July 2009 “Look at it this way. If you don't tell an insurer about all relevant facts relating to your policy and the company finds out, then that would invalidate the policy. In other words it would make it worthless. So being tempted to bend the truth a little to cut costs means running the risk of wasting your money altogether.  

“I don't think that's worth the risk. Sure, insurance can be expensive, but you're paying for peace of mind and, with that, you need certainty. If my home burnt down, for instance, I would want to know for certain that my insurance policy would pay out to replace it. Without that assurance, the premiums are a complete waste of cash.  

“I can understand the temptation to inflate insurance claims, but trying to swindle an insurance company out of extra cash seems a foolhardy idea, especially as you could be prosecuted and end up with a criminal record. That's something that's not worth taking the risk for.”  

To read the ABI’s press release and report on insurance fraud, click here.


Simon Read’s column can be read in full here:   


ABI Customer Impact Panel report  

The Annual Report of the independent Customer Impact Panel, which oversees the ABI’s Customer Impact Scheme, is published today. The Report includes the Panel’s commentary on the 2008/09 Customer Impact Survey and recommendations for the future of the Scheme. Key points from the report are:   

* The Panel noted steady progress shown through the Survey. Post-sale relationship scores improved and sales process scores either increased or stayed the same, although the scores for developing and promoting products and services fell slightly. Satisfaction with complaints handling remains very low, but the Panel noted that the score had improved this year. 

* Company reporting of Survey results showed some improvement, but work is needed in some cases on improving the level and quality of information provided. 

* Good progress has been made in addressing recommendations made in the 2007/08 Report. The Panel has made a series of further recommendations to improve customer experiences of the life, pensions, savings and investment industry, which it will look to the industry to work on in the coming year.  

Mike Ross, Chair of the Customer Impact Panel, said:  

“Steady progress has been made by the companies involved in the Customer Impact Scheme, and we are pleased that this year, three new members signed up to it. The Scheme is evolving all the time, and the Panel, together with the ABI, is working on a five-year plan for its development and expansion. We expect to make further announcements about this later in the year.”    


Insurance Industry Working Group  

The Insurance Industry Working Group, set up by the Government and co-chaired by the Chancellor, Alistair Darling and Andrew Moss, Group Chief Executive of Aviva, published its Vision for the insurance industry in 2020. The report makes a number of recommendations to ensure that insurance is able to maintain its place at the forefront of the UK’s financial services industry, and to improve its customers’ experiences of dealing with it.  


The ABI’s Director General Stephen Haddrill commented:

“This report paints a comprehensive picture of the importance of the insurance industry to the UK economy. Insurance is not banking, and because of this it has been able to weather the storm of the financial crisis. But the industry is not complacent, and the report’s recommendations represent a solid set of ideas for both insurers and policymakers about how best to build on the strength of the sector, improve its competitiveness and support UK plc. Its focus on boosting customer confidence is of particular importance, and the ABI is already engaged in a number of initiatives in this area.”  

“A competitive insurance sector, able to provide a wide range of risk management tools, will bring good consumer outcomes. Achieving the best results will depend on all the report’s recommendations, which the ABI wholly support, being implemented in full – doing so will create the ‘virtuous circle’ referred to in the report. We will be working with our members to achieve this, and we urge the Government and FSA to do the same.”