Director General, Association of British Insurers2016 promises to be a big year with a referendum that could decide not only Britain’s place in the world but the future of the Conservative party’s leadership. The stakes could not be higher. With three out of four governments in the UK to be decided, 2000 council seats and four city mayors, there will be plenty of campaigning.
And in the regulatory world, we will be looking to see the agenda of a new FCA CEO, how Solvency II develops and settles and whether the international agenda of prudential regulation slows or speeds up.
The decisions made by politicians and regulators will affect insurers and our customers profoundly. So with this complex environment in the background, what is the role for the insurance industry and how can it move forward with its priorities?
1. Engagement
As an industry, we can help shape solutions with regulators and politicians. We have shown that in delivering Flood Re, in securing significant improvements to the draft Solvency II directive and through meaningful change to tax reform on BEPs and Diverted Profits Tax. But we also need to ‘lean in’ and emphasise that what we do for modern society and the economy is in fact becoming more important. By being less bashful about our successes, we show that we can be valued partners in finding solutions to challenges. Speaking at Lloyds of London to the Insurance Institute of London last week reminded me of the importance of cross industry relationships. The industry has more strength and impact when it speaks with one voice wherever possible.
2. Reputation
However, improving our reputation remains critical to our political traction. The industry proves its value in responding to major events, as it has done during the recent winter floods. But we also need to have the right attitude and be sensitive to perceptions, outside of the big events. The ABI provides a forum for the industry to tackle reputation and drive best practice, through initiatives such as the Statement of Best Practice for Critical Illness, the Statement of Principles in flooding, and most recently working with BIBA on the Code for vulnerable customers. But as an industry we must continue to review and improve our reputation, and build customer trust.
3. Fit for the future
In this rapidly changing world, we can also improve our reputation by harnessing technology to make ourselves fit for the future. With a heritage of responding to economic change from the Industrial Revolution, the progression from horse to motor car and the development of modern medicine, insurance has a key role to play in innovating and embracing the opportunities the digital and technological revolution brings. This can help drive consumer engagement and outcomes, such as through a Pensions Dashboard, or interconnected devices that help manage risk, both of which hold real promise.
We live in a fast moving and politically challenging world, but we must keep up and continue to develop, even if the change is constant.
Huw Evans is Director General of the Association of British Insurers (ABI)