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Huw Evans speech at the ABI Annual Dinner 24th February 2020

Thank you, Jon. And allow me to add my welcome to everyone here. You all have many demands on your time and we really appreciate that you have chosen to spend a few hours with us here this evening.

I will shortly be introducing, John Glen, Economic Secretary to the Treasury, but before then I wanted to reflect briefly on the fast-changing world we live in and the opportunities, challenges and new imperatives to action that we face. If that sounds like a lot to cover in eight minutes, don’t worry, this is the short version and I’ve timed it.

Anyway, let’s start with the challenges. Whether it’s not enough businesses or individuals with insurance cover or sufficient retirement saving, an inadequate social care framework, a welfare and NHS system built around 20th century workplace illness and health provision, a lack of trust in our sector, or the stifling effects of some regulation on customer service, even a starter for 10 on the challenges we face is a long - and familiar -  list. In some cases, we have been talking about them for literally decades. What is changing are the contexts in which we are seeing these issues. Under-insurance of businesses and residents who need flood cover in a world of rising temperatures and more frequent flooding. Lack of social care funding options when more people are living longer than ever before. Not enough take-up of health and protection insurance for individuals and employees suffering from mental health or muscular skeletal conditions in a western world where these are leading sources of pressure on the workplace and the NHS.Not enough cyber insurance in a world where digitally-enabled threats grow daily and connectivity is growing exponentially.  An inadequate system of financial advice and guidance for people given almost complete freedom  over their retirement choices. A planning and construction system that is not fit for purpose when it comes to fire safety standards in a world where the use of combustible materials in construction is increasing.

It would be easy to be depressed by such a list, especially when it is not even comprehensive. But instead, I hope it motivates all of us when it comes to the potential for change.

Our world and our own country may be changing around us in ways that are profound and long-lasting but we can offer solutions, not just diagnose the problems.

So what are some of these solutions? Some of them are in the potential of our financial power.  Our long-term savings firms have billions of pounds of trapped capital as a result of Solvency II over-engineering and additionally face further significant restrictions in investing for the long-term whether it is in infrastructure, renewable energy, social housing, major construction projects or regeneration of our towns and cities. This is also capital that cannot be invested sufficiently for the long-term in tackling social care or ensuring people have the retirement market they need. In particular, an overly cautious regulatory approach to illiquid assets can mean we miss valuable opportunities to invest in our country’s future.

Other solutions require public policy change and whether it is 1997 or 2020, one reason to always welcome a government with a strong majority  is the opportunity to tackle lasting issues. If this government partners with health insurers, we can help ensure more patients are treated and less pressure is placed on the NHS. If we were to develop auto-enrolment to encompass protection insurance, it could open up a huge safety net for employees funded outside the state. If we stop making essential insurance needlessly expensive with IPT rises, we can do more to ensure the poorest in our society are protected from the effects of climate change.

Then there is regulation. I hope the leadership of our regulators with us here tonight note I have included them in the ‘solutions’ section of the speech, rather than the ‘problems’ section. I won’t ask for an audience vote on whether I got that right. But I will say that for our sector to play its full part, we do have to be able to have a sophisticated and evidence-based conversation about proportionate, effective and agile regulation for the 21st century without being dismissed as ’just wanting deregulation’.   We have to be able to make sensible arguments about both the operational performance of our regulators - for example how long it can take to process relatively simple authorisations or how little time is often given for massive data requests - as well as to speak openly about what could improve, for example by having a competitiveness objective that ensures our regulators share the same global Britain vision as our government, and accountability frameworks to ensure Parliament is able to hold regulators fully to account. Nobody regulates the regulators but trade associations and our members see much of what they do and how they do it. We are lucky in having individuals of high integrity and ability at the top of our regulators and I hope we can work constructively together on how both industry and regulators need to evolve to maximise the contribution we can all make to a financial system that is both productive and safe.

So before I close, let me focus on those new imperatives to action; the areas where we haveto do more, irrespective of any barriers in our path. On climate change, our societies  have less than a decade to make fundamental changes, if we are not to condemn our children and their children to a world of frightening instability and frequent natural disasters.  As the insurers of those risks and as long-term asset owners of our economy, we have a dual role to play in risk management and decarbonisation if permitted to do so by policy-makers and regulators. On Diversity & Inclusion, we have much more to do if we are to make our sector a leader in gender, BAME and LGBT inclusion. We have made a start but if we want the talent of the future to work for us and not tech giants, we have to do more. On vulnerable customers, we must continue to improve our own processes, developing further our industry codes on vulnerability and launching in two months’ time our new ABI mental health standards. And on data, in a world being transformed by a digital revolution, we have to establish new permissions with our customers for how we do our business; a process we will be launching at our conference tomorrow.

The amazing thing about this sector and its potential power is that I’ve only provided a snapshot of what it does and can do. There is so much more. And I firmly believe that the more we do, the more we will engage with the spirit of the times. ‘Responsible Capitalism’ has been given a bad name by some of the capitalist philanthropists at Davos and by some seriously unreadable books. I am not talking about virtue signalling or academic theorising, but taking seriously the duty on all of us who work in the private sector to maximise our contribution to our society and economy. For insurers and long-term savings providers we can do so knowing our foundations are solid and that we are Helping Britain Thrive.  Our potential is clear. Our track record of coming up with solutions such as Flood Re and pensions dashboards speaks for itself.  We can identify the problems, recognise the new imperatives of our changing world and play our part in delivering the solutions.

So, let’s face those huge challenges of the future with renewed confidence and determination to make a difference. Working effectively as a sector with the ABI and our governments, parliaments and regulators to maximise our contribution and meet the needs of our customers and our world. Colleagues, let’s rise to these challenges.

Thank you.


Last updated 24/02/2020