On Tuesday 1st November, ABI's Director General, Hannah Gurga, gave a speech at Gibraltar Finance's Insurance Breakfast, one of a series of sector specific events celebrating Gibraltar Week.
Good morning. I’m delighted to be participating in today’s breakfast seminar as part of Gibraltar Week and would like to thank Minister Isola for extending the invitation.
Growing up, I had a little more experience of Gibraltar than most. For many years, my family would fly to the Rock, en route to summer holidays on the Costa del Sol. But on taking up the role of Director General of the ABI, I have had cause to engage more fully. In the process, I have come to admire the place, and its people, enormously. Under the shadow of that iconic rock, 32,000 Gibraltarians have long punched above their weight. With half the world’s sea trade still passing The Rock each year, Gibraltar has always played a vital role in global commerce and enterprise.
Today, it is one of the financial service industry’s great success stories. And its insurance sector is one of its crowning achievements.
In 2000, there were just 13 insurers in Gibraltar. Today, there are 40. Gibraltar is home to our industry’s innovators too. Such as Zego and Marshmallow, two of the most successful Insurtech start ups.
In April, I returned to Gibraltar for the first time in many years. It was an instructive, and inspiring, trip. Everyone I spoke to was so committed to making Gibraltar an attractive place for business and for innovation.
I had the pleasure of meeting Minister Isola. And I wanted to share with you a couple of observations that really stood out for me and perhaps go some way to explain Gibraltar’s success. At the end of our conversation, I asked the Minister for directions to my next meeting, with Kerry Blight, the head of the Gibraltar Financial Services Commission. Rather than direct me, the Minister escorted me there himself.
On our walk the Minister surprised me again. He asked me: “Hannah, what can I do to help you and your members?”
It was such a telling moment. It was so indicative of a Minister striving to make Gibraltar the most welcoming home for financial services in the world. When we met with Kerry, I was then struck by the strength of their relationship. How aligned the Government and Regulator were and how clearly they both believed in the same goal: making Gibraltar home to a thriving, robustly regulated, financial services sector.
With the time I have today, I want to reflect on a similar question to the one the Minister asked me: “How can I help my Gibraltarian members?”
After my visit in April, during which I met many ABI members, I hope I can say with some confidence that I am building on strong foundations already established. My predecessors, for instance, worked hard following the EU referendum to ensure Gibraltar’s financial services firms continued to have access to the UK market. Engaging closely with UK parliamentarians and HM Treasury to shape the Financial Services Act 2021 and the Gibraltar Authorisation Regime. This is an example of successful ABI engagement that was vital for our Gibraltarian members and a key achievement of which we are rightly proud.
But how do we now build on it?
For me, what is most important is that the ABI is attuned to the needs of our Gibraltarian members and that we represent them as best as we can. With 30% of the UK’s motor insurance market written from Gibraltar, this is an obvious place to start.
A key priority is the modernisation of the vehicle fleet, across private and commercial, to help move us towards Net Zero and improve road safety, among other goals. The ABI is fully committed to supporting the decarbonisation of transport, in line with the UK Government’s commitment to end the sale of new petrol and diesel cars by 2030.
This is a tough goal, with challenges along the way:
- Such as establishing best practices for EV battery recycling
- Or ensuring we have enough trained technicians in the repair network for ever more complex vehicles.
These challenges cannot be tackled alone but together, we can and will address them.
Self-driving cars may seem a little science fiction, but automated lane keeping systems are just around the corner. ALKS will be the first technology to be considered self-driving by the UK government and could be with us early next year. This will naturally give rise to questions about liability when collisions involve automated vehicles. That’s why we are working closely with government and beyond to establish data sharing principles to show whether a driver or an automated driving system is in control at the time of a traffic incident.
We must also educate consumers on what these changes mean for them. To this end, the ABI is creating a suite of resources to help consumers understand their obligations while using automated driving technologies.
Turning to regulation. Next year we will see the implementation of the FCA’s new Consumer Duty. Put simply, the Duty will require firms to deliver good consumer outcomes for retail customers in the UK and the Duty will apply to firms in Gibraltar selling into the UK. The ABI engaged actively throughout the consultation process, working closely with the FCA and the Financial Ombudsman Service to encourage a consistent and complementary approach to application of the new rules.
Earlier this year, at the ABI’s Conduct Regulation event, the FOS confirmed that the Duty will not be applied retrospectively. Firms’ conduct will be assessed against the rules and standards that applied at the time. This was an important development, and we continue to engage to ensure interpretation of the new rules is clear.
Another key area of focus is the new Financial Services and Markets Bill.
The Bill, which is currently making its way through parliament, is the most significant piece of financial services legislation since FSMA was introduced more than two decades ago. It establishes a new blueprint for financial services regulation in the UK, implementing the outcomes of the Future Regulatory Framework review, and delegating rule-making powers - which used to sit at EU level - to UK regulators. The Bill gives the regulators a new secondary objective - to promote economic growth and competitiveness. The kind of attitude to regulation that was so abundantly clear when I met both Albert and Kerry in April.
While the new objective is very welcome, we believe it must be accompanied by specific and robust reporting criteria so that Government and Parliament can hold the regulators to account. And ultimately to ensure a meaningful change in the regulators’ approach. Dare I say the UK could take some inspiration from Gibraltar? In creating a regulatory environment that is welcoming to business, and promoting economic growth.
Of course no speech at this time would be complete without reference to Solvency II.
While the Gibraltar Financial Services Commission manages prudential regulation, I know they will be watching what the PRA does with interest and our position is clear: There is too much capital locked up within our industry today which could, and should, be invested to the benefit of all society. Targeted changes to elements of the Solvency II regime are needed to support the ambitions of the UK Government and our industry for growth and investment.
If we get reform right, it will maintain high standards of policy holder protection - while enabling greater investment to support the levelling up of our economy and boost the transition to a greener UK.
I started out today by setting myself a version of the question that the Minister had asked me: “How can I help my Gibraltarian members?”
Of course, I can’t answer that question alone. I want to hear more from all of you about what the ABI could and should be doing for Gibraltar but before I hand over and open up that conversation, I do just want to say one more thing: At the ABI, we are enormously proud to have a part to play in Gibraltar’s extraordinary story. A small place in the shadow of a great rock that has always been at the centre of global trade and commerce and how fitting that insurance should have thrived there.
There are, after all, certain similarities.
Insurance is a small idea: that the many can protect the few. But that small idea has had an outsized influence on the world, laying the foundations on which the modern, global economy has been built. So how fitting that Gibraltar - a small place with an outsized influence on the world around it – should become home to such a vibrant insurance industry.
My commitment to you is that the ABI will continue to play our part in building that industry.
Thank you.