It is my pleasure to welcome you all to the ABI’s annual dinner, and my privilege to do so as the ABI’s new Director General.
I’d like to give particular thanks to the Economic Secretary, John Glen and our sponsors, KPMG. I would also like to thank the team at the ABI for putting on such a magnificent event. And I must offer my heartfelt thanks to Huw Evans. Huw is a deeply respected figure in the industry, and rightly so.
In December, Huw kindly invited me to sit in on what turned out to be his last Board meeting. I should have been immediately suspicious because the main topic of conversation appeared to be, well, Huw and the frankly stratospheric results he had achieved in the member and staff surveys.
As the praise finally faded away, one Board Director turned to me and said — “Only one way for you to go from here”.
Not quite the positive encouragement I was expecting!
Those surveys tell a clear story. Huw worked relentlessly for the ABI and this industry. And I'm sure we would all like to take this opportunity to thank him. Please can I ask everyone to join me in a round of applause…
It is my honour to be an ambassador for an industry that matters to every household and business across the country. And it is an honour to succeed Huw.
Now, I should be careful, because some of my old colleagues are sure to be in the room . . . .
This is the industry that helps the prudent, prepare for later-life. This is the industry that provides support when the unexpected happens. This is the industry that employs 320,000 people across Britain, and contributes £30 billion to the UK economy.
But I do want to say how much I care about this industry. Because there is no other like it, with my sincere apologies to our friends over at UK Finance.
This is the industry that helps the prudent, prepare for later-life. This is the industry that provides support when the unexpected happens. This is the industry that employs 320,000 people across Britain, and contributes £30 billion to the UK economy.
I have deep confidence in the future of our industry. The wellspring of that confidence is the strength of the people in this room.
It is what the ABI calls our strength through association.
When we take this strength, and work closer than ever - with government, regulators, businesses, and society at large - we can make a profound and positive difference. I’d like to share some examples of why this strength through association makes me so confident.
Let me touch on 4 topics. Climate - Building Safety - Social Care - and how we are guided by our customers.
Our changing climate is perhaps the greatest challenge facing us all. I know that your teams have worked flat out in the last few days, helping your customers respond to the chaos caused by storms Dudley and Eunice. And we all know what the science says - The risks caused by extreme weather will only get worse –more common and more damaging. The traditional insurance model cannot handle climate risk alone.
But, by working with our fellow stakeholders - not least government and the regulators – we can play an essential role, both in how we shoulder the burden of risk as insurers and in how we fund the transition to net zero as investors.
If the UK is to meet its 2035 target of a 78% reduction in emissions, we need to invest £2.7 trillion. Our sector is exactly the kind of long-term investor who can provide the necessary patient capital; but regulatory reform is needed if we are to unlock our full potential.
Much has been said about Solvency II, and I don’t propose in my first speech as Director General to focus on the finer points of the matching adjustment and fundamental spread. However, the UK’s departure from the European Union is a huge opportunity. Reforming Solvency II could unlock £95billion to invest in sustainable energy and infrastructure.
In doing so, our industry can create tens of thousands of jobs and help to level up all nations and regions of the UK.
Until the fire safety issues are fixed, we will do everything we can to help those leaseholders secure affordable insurance, and we are already working closely with the Government and the FCA, to explore how this can be done.
Let’s turn to Building Safety Reform. Since well before the tragedy at Grenfell, the ABI has been calling for fundamental reform to improve the fire safety of buildings across the UK. We welcome the Government’s Building Safety Bill. It is a landmark opportunity to deliver homes where people feel safe. We believe that the legislation should apply to all high-risk buildings. Until the fire safety issues are fixed, we will do everything we can to help those leaseholders secure affordable insurance, and we are already working closely with the Government and the FCA, to explore how this can be done.
At our best, ours is an industry that understands risk and makes it manageable. That means being ambitious about addressing the risks that our society faces.
Like social care, where insurance and long term-savings can play a vital role in helping people prepare for an unknown future. In January, we met the Economic Secretary and the Minister for Care to discuss the challenges facing the social care insurance market. Since then, we have established an ABI Board steering group and commissioned research from the Pensions Policy Institute to explore the potential market for products to help pay for care. The public policy challenge – of an ageing population, who do not always plan for their future care costs - is not one our industry could, or should, tackle alone.
But, together - through the strength of our associations - we can and will address it.
Doing so will demand that we forge a new, deeper relationship with all our stakeholders, not least the government. But the challenges society faces today are so great – and our potential impact so profound – that I will build those relationships, and we will always have our seat at the table.
The success of our industry demands that our customers continue to see the strength of their association with us. In this new year, in a world emerging from the pandemic, we are redoubling our efforts to earn and retain their trust.
Our new Consumer Committee will bring fresh perspective to the ABI. As will our Board, led by Nicky Morgan as Independent Chair, and with Dianne Hayter an Independent NED. We will also establish a new Consumer Advisory Group to amplify the voice of our customers across the industry.
How we communicate with customers is key. Some of our customers can find our products too complex. But that’s not surprising when 4 out of 5 working age adults have numeracy levels below those expected of a 16 year old. That is why I am pleased to announce the ABI is partnering with Plain Numbers, a social enterprise that uses behavioural science to make products better understood.
Our industry will only be as good as those who work in it. All the firms in this room are making progress to ensure our workforce is more inclusive and diverse. Over 30 firms are now signatories to the ABI’s -- Making Flexible Work Charter. Across the sector, women now hold 29% of Board roles, up from 19% in 2019. I am proud to be able to announce that, today, our industry has committed to double the number of apprenticeships - to reach 2,500 by 2025.
So - On Climate Change, this industry will make a major contribution to Net Zero. On Building Safety we are determined to find solutions for leaseholders. On Social Change we are uniquely positioned to help our customers prepare for an uncertain future, and to help address these challenges we are making sure that the Consumer’s voice will be heard.
This room is filled with leaders who are committed to delivering long-term value, for the economy and for society. The ABI must ensure that this value is appreciated. To better understand this value, let me commit today to meeting each and every ABI member this year.
We are a member organisation. Your vision will be our vision – Your goals, our goals.
This year our mission is to convince all our stakeholders, that those goals are the right ones for the nation.