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Speech by Huw Evans at the ABI Motor Conference 2018

Thank you, Joanna

Please allow me to extend my own very warm welcome to the ABI’s Motor Conference 2018. The last time we met in October 2016, just weeks before the US presidential elections. I remember saying in a panel discussion how much I was looking forward to being able to say to my (then) six-year-old daughter that the United States had just elected its first female leader. That didn’t turn out so well so I will steer clear of the political punditry today and maybe it’s not a coincidence that I’ve just been asked to stick to a few opening remarks and my colleague, Louise Hanson, has been trusted with the panel.

We have two great keynote speeches coming up so I will be brief and confine myself to three points.

The first is to say some thank yous. To our friends and conference partner, DAC Beachcroft, to our breakout sponsors, KPMG, The Floow and Octo Telematics, our exhibitors and all the speakers who have given their time today, especially our keynote speakers, Lord Keen and Paul Geddes. As someone who speaks at a fair few events myself, I never take for granted the commitment involved. Thank you.

My second point is to ask the question; what do we want to achieve here today? My main hope is that at a time of considerable change in the market, with disruption driven by new technology, changing customer patterns of usage, the requirements of climate change adaptation and a challenging regulatory and political landscape, we can take stock of where we stand and effectively differentiate between the near-term challenges and the longer-term fundamentals.

This is because those longer-term fundamentals are profound indeed and we can see the direction of travel even if we do not yet know how fast the journey will be or whether there will be any detours on the way. We know that advances in technology that thankfully make our vehicles safer will continue to lead to downward pressure on premiums. This is welcome on both counts. But it means that any individual business built around current income and loss projections is going to struggle. We also know that consumers are already beginning to shift away from traditional modes of car ownership, especially in the big cities and among younger demographics. As someone who lives in a semi-rural area, I think this trend is sometimes exaggerated by the metropolitan commentariat- let’s call it the Jeremy Vine factor - but it is undoubtedly a factor to consider. What is undeniable is that the rollout of autonomous vehicles is set to lead to a shift from personal motor insurance policies to commercial product liability for vehicle manufacturers and software developers. What is equally undeniable is that the use of big data to improve customer pricing and experience poses both challenges and opportunities for insurers. I remain of the view that we are still just beginning to have the public debate we need about permission levels for data use in the digital age.

So there is much to think hard about for the medium-term. But we live in the present and so my final point is to note that we meet off the back of a very intensive period of public policy and regulatory focus, including the passage of the Autonomous Vehicles and Data Protection Acts, the development of the ABI/BIBA Guiding Principles & Action Points for fair pricing and the recent announcement of an FCA Market Study. And, of course, the Civil Liability Bill with its much-needed reforms to the setting of the Discount Rate, its establishment of a tariff for whiplash injuries and the associated progress on setting a revised SCT limit at £5,000 and the building of a new portal. This has not been an easy time and I think we are all aware that - in the Discount Rate debate, in particular - we are talking about public policy that fundamentally affects the lives of the catastrophically injured.  We will take our responsibilities seriously to make the new system work for claimants and our industry has made a clear and unequivocal commitment to pass on the cost benefits from the reforms, as we are already seeing in falling Motor premiums.

The Civil Liability Bill has its hopefully final stage in Parliament today in the House of Lords this afternoon. It is therefore doubly appropriate that our first keynote speech is delivered by the MoJ minister, responsible, Lord Keen.

Richard Keen was one of the leading barristers of his generation before joining the Government as Advocate General for Scotland in 2015. He was appointed Lords minister in the MoJ in 2016 and is also the minister responsible for the crown dependencies. He has been at the heart of framing the Civil Liability Bill and then taking it through Parliament. Please welcome Lord Keen of Elie.

Last updated 20/11/2018