Speech by the Director General: Our Mutual Friend

I’d like to extend my thanks to Nick Turner for inviting me to join you today. It really is a pleasure to be here speaking to you all.

In fact, it is a particular pleasure. Where I live, in rural Kent, my nearest neighbour, Andy, is an arable farmer. When I mentioned to him that I was coming to visit NFU mutual, I could scarcely stop him from talking.

The mutual is indeed a powerful idea, as NFU Mutual shows.

He told me: How you could always be relied upon to pay out claims. How he’d been with you for decades and would be for decades more. How his father before him had been a member too, and how proud he is to know he isn’t just a customer, but is a member with a direct interest in the business

The mutual is indeed a powerful idea, as NFU Mutual shows. One that has grown from seven farmers at the turn of the twentieth century to more than 900,000 members today. While yours is a business that is rightly proud of its rural roots, you now span the length and breadth of the country: rural and urban, city and countryside alike.

As my neighbour illustrates, you have a connection to your members like no other. With agent offices all across the country, you have built deep, lasting relationships with your customers. It is this personal service that really matters to members like Andy. No wonder your retention rates are so high, no wonder Which? magazine has named you Insurance brand of the year. 

Mutuals were the foundation of the entire insurance and long-term savings industry. Combining the strength of the many to protect an unfortunate few. Providing a safety net that protects businesses and individuals from the risks the future might hold and in the process turns the future from a risk into an opportunity.

Strength Through Association

At the ABI, we call this idea “strength through association”. It is the promise of our industry, and it is a promise that we have kept:

In the past year, we have, contributed £30 billion to the UK economy, sustained 320,000 jobs and been stewards to assets worth £1.7 trillion. In the dark days of Covid, far from the headlines, ABI members paid out £2.5 billion in claims.

“Strength through association” is also the promise of the ABI itself. To bring our industry together in order to strengthen us all individually. To bring our industry together with others beyond it to better serve our customers and society at large.

I am especially grateful for the relationship we have with NFU Mutual. NFU Mutual Chief Executive, Nick Turner, spoke with real passion and clarity about NFU’s vision at an ABI Town Hall last year, inspiring our staff. Amanda Mason chairs our influential conduct regulation committee.

In fact the relationship is so strong, that our brilliant Head of Conduct Regulation, Raluca Boroianu-Omura, is moving to NFU Mutual to work with Amanda.

While we will miss Raluca greatly, I hope this reflects how highly you regard the ABI’s deep technical expertise and professionalism!

The Value of the ABI

Beyond serving as a talent pool for the industry, the ABI exists to give our industry a powerful, collective voice. We know, from recent surveys of our stakeholders, that this voice is cutting through. 

We’re seen as an authoritative and unifying voice for the industry – and the government and regulators feel like they are turning to the entire industry when they turn to us. But, as Director General, I want the ABI to be judged on our record: on what we achieve for you, not how we are perceived by others.

Our mid-year review, recently published, shows some of the ways that we are helping the industry to thrive, such as: 

Our work on the consumer duty, supporting vulnerable customers, GI pricing practices, whiplash reforms and leading the industry efforts to improve the post-Grenfell building safety environment, setting out a new climate roadmap for the industry, and leading the industry response to major claims after storms Dudley, Eunice and Franklin, where we know your claims teams have been working hard to help people and businesses get back on their feet.

Most recently, we have been working hard on the Financial Services and Markets Bill, currently working its way through the parliamentary process. While this might sound a little dry, this is important legislation, both for our industry and the wider economy. It provides an opportunity to create a regulatory framework that is fit for Britain and its future, and it could unlock capital trapped within our industry, that will significantly boost investment, helping to speed our green transition and level up the country.

A new statutory objective – that requires the regulators to have regard to economic growth and competitiveness - is welcome. The ABI has campaigned for both this and greater accountability for regulators to parliament.

The ABI will keep pushing for the very best for our members, knowing that the benefits to society of doing so will be great.Now, we’re not there yet, but with a Prime Minister who campaigned on the issue of Solvency II - perhaps the most unlikely soundbite of an election campaign that any of us could imagine, I do think we have a real opportunity.

The ABI will keep pushing for the very best for our members, knowing that the benefits to society of doing so will be great.

I should say a few words about our new government, and how the ABI is approaching the new administration now the days of Boris Johnson are over.

Of course the sad events of recent days have had an impact on the political world, as the nation has rightly been in mourning.

Despite a period of extraordinary change, however, we have been highly engaged with the new government: meeting Andrew Griffith, the new Financial Secretary and City Minister as well as new advisors in No 10 and Treasury. We will also be building on an existing relationship with the Secretary of State at DEFRA, Ranil Jayawardena MP.

The new cabinet is very much in the Prime Minister’s image, with close allies filling the top table. Thérèse Coffey as Deputy Prime Minister and Health Secretary, Kwasi Kwarteng at the Treasury, and James Cleverly at the Foreign Office.

This certainly makes for a difference from the Johnson-Sunak years, when there were clearly tensions between the two. Today, the Chancellor and Prime Minister are as close as any since Cameron and Osborne.

It is clear that they are going to be united in the pursuit of growth, governed by a philosophy that is low-tax, pro-business and pro-investment. They have surprised many with the extent of government intervention on energy prices, so dogma won’t always get in the way of pragmatism.

But they have promised to confront treasury orthodoxy – the departure of the Permanent Secretary, the most senior Treasury official, is a very notable development. Whether the gamble for growth pays off remains to be seen.

With an election no more than two and a half years away, the government faces a tough road to victory, with Labour consistently ahead in the polls. They will be pursuing growth, and they will be looking for ways – like Solvency II – to unlock investment.

It is a good time to be an industry at the service of sustainable economic growth, and the ABI will continue to be a loud and proud voice of that industry.

Supporting Mutuals

A little over six months into my role as Director General, I want to be a voice for all our members – to government, regulators and beyond. 

That means I want to represent every type of member, be they insurers or long-term savings providers, mutuals or shareholder owned, platforms or Friendly Societies and wherever that member might be -  a commitment that has already seen me visit Gibraltar, Scotland, and now Stratford.

While our role is to be the voice of our industry, I want the ABI to be a strong voice for mutuals too.

The link between the ABI and our mutual members has always been deep. Thirteen of our members are mutuals, and our President, Barry O’Dwyer, is himself the head of a mutual: Royal London.

As the new Director-General of the ABI, I want us to do more to communicate the power and value of mutuals – to politicians and the public. In November, the ABI will launch a new campaign calling #SecuringFutures, to give voice to all the great things we do as an industry.

With a Mutuals Bill possibly on the horizon, I know there is more we can do to help you, but I also want to hear directly from you how best we can. We’ll be convening mutual members to ensure that we know exactly what you need, and how we can best help you.

Whether it’s consumer duty, cost of living, whiplash reforms, the Discount Rate, climate change, major claims or flood defences, I want to speak for mutuals to those who need to hear from you.

Mutuals are a powerful idea, and one that has stood the test of time, but all ideas, however good, need powerful advocates, and I intend to be one for you.

In a fiercely competitive and globalised world, mutuals are a reminder of how to put the customer at the heart of your business over many decades.

They remind us that you can be a significant national player, while delivering a first-rate local and personal service.

If you don’t believe me, I suggest you strike up a conversation with my neighbour Andy, and in time I hope to prove that his passion for your work is mine too.