Huw Evans, Director General of the ABI, reflects on 2020 and shares his thoughts on the industry’s crisis response
Our country has some of the best futurologists and risk scientists in the world but no-one quite predicted 2020.
It has been a year like no other in living memory, but I am very proud of how the ABI and our members have worked together to navigate such a seismic year. Our ABI member survey had our highest-ever scores for positivity and value for money, so we know we have been there for you when it mattered most. However, none of us should shy away from the fact this has been a bruising year at times and that the economic circumstances we face will provide significant challenges ahead. The pain and hardship many people have suffered in 2020 will take a long time to ease.
Although the media headlines have been focused on disputed business interruption insurance claims, the full story has been much more positive. This sector – the ABI’s members, Lloyd’s, brokers – stepped up and partnered with the UK government to form the largest sectoral Covid-19 charitable enterprise in the UK. The Covid-19 Support Fund has raised more than £100m to charities on the front line of the crisis, dealing with issues such as domestic abuse, mental health crises and helping vulnerable people.
We have also seen ABI-led, industry-wide co-operation in other key Covid-19 areas with wide-ranging customer pledges across insurance lines; helping broker the trade credit reinsurance scheme with government to keep supply chains flowing; a voluntary agreement not to deduct government grants from small businesses from insurance claims; quiet and painstaking work behind the scenes on future pandemic insurance solutions; development of a reputation roadmap for the sector; and managing a 715% increase in MP caseload, more than 145 media interviews, more than 40 phone briefings on Covid-19 with Ministers and politicians, and providing authoritative public information driving a 73% increase in visitors to the ABI website.
Yet, despite this being a year with more crisis management than any in my 12 years at the ABI, I am glad we have been able to drive forward so many of our long-term strategic priorities and secure important outcomes for members across the piece.
In the long-term savings space, we set the agenda at our annual conference with our report on the pensions freedoms five years after their introduction, and we have been consistently cited in the House of Commons as we have influenced the implementation of key elements of the Pensions Bill. We have also seen the delay to phasing out of RPI as relates to defined benefit pension schemes postponed until 2030 following our lobbying. We successfully intervened in the Court of Appeal hearing on the Prudential/Rothesay case that helped ensure an objective legal framework for approving Part VII contract transfers.
In health and protection, we have been hard at work explaining both the essential contribution that the private health insurance market has played in relieving pressure on the NHS while keeping vital services open for customers; emphasising more than £90m in protection pay-outs to families who have endured the personal devastation of Covid-19; publishing the first annual report on the Code on Genetic Testing and Insurance with government; and working with third-sector experts to publish new mental health standards to improve accessibility to insurance for vulnerable people.
Our tax and advocacy teams led campaigns to avoid further increases in IPT in the March budget, although we know the pressure on the Chancellor to raise taxes will be unrelenting next year as the pressures of our national debt take hold. The tax team also secured confirmation of a change in the VAT treatment of insurance services supplied by the UK to the EU, moving from VAT exempt to enabling input VAT recovery. This is something we have been pressing for since 2016, and could mean a significant increase in recoverable input VAT for members engaged in international business. We have also delivered 48 events for members in 2020, transitioning from in-person to virtual and, at the time of writing, have just been shortlisted for a number of national awards.
Away from Covid, we were pleased with the direction of travel set out in the FCA’s long awaited GI pricing review, especially winning the argument against banning auto-renewals. This will be a huge area of work in 2021 as will the long-awaited review of Solvency II where we have a once-in-a-generation opportunity to shape a prudential regulatory framework for the UK that facilitates green investment, streamlines reporting and process and tackles some of the current problems.
Next year will see increased focus on climate change and progress on diversity and inclusion as attention turns to how we can drive further necessary changes as a sector to meet the challenges we face. We are gearing up for this and were delighted that more than 30 members joined the ABI in signing the Race At Work Charter in October ahead of our first diversity summit.
We have a lot more to do in 2021, but I wanted to end with a personal thank you to members on behalf of the whole ABI team for the professionalism, commitment, integrity and openness displayed in addressing the challenges we have faced together. Our purpose is ‘strength through association’ and this has never felt more relevant.