Good morning everyone.
It is my pleasure, as the President of the ABI, to welcome you to our Annual Conference 2023. Thank you for joining us today – both to those in the room or watching online - for what I hope you will agree is a fascinating agenda. We’re delighted to welcome the Shadow Chancellor, Rachel Reeves, Economic Secretary to the Treasury, Andrew Griffith, and former Director General of M15, Baroness Eliza Manningham-Buller, alongside many other distinguished guests.
This is my second and final year of having the honour of addressing you as the ABI’s President. To echo what Hannah Gurga said at last night’s Annual Dinner, it has been an extraordinary twelve months.
Four Chancellors, Three Prime Ministers, Two Monarchs…
One ABI.
Despite unexpected changes and unprecedented challenges, together we achieved a great deal. Last year, I talked about the three c’s: change, collaboration and commitment. I’d like to take a moment to reflect on our work in each of these areas amidst these 12 months of change and to consider how, collectively, we can build on that for the good of the industry, the wider economy and, most importantly, our customers.
Change
First, change.
Our industry has never been afraid to adapt and our ability to be fleet of foot in responding to external events was again the subject of a significant ‘stress-test’ in 2022. Storms, extreme temperatures, and wildfires illustrated starkly the increasing reality of climate change. Political turmoil – at home and across the globe, with Europe shaken by Russia’s invasion of Ukraine – had far-reaching social and economic consequences. Indeed, the passing of Her Majesty the Queen, after a lifetime of unwavering public service, brought a moment of great sadness and reflection for the nation.
Closer to home, it was also a year of change for the ABI. A new Director General, new members of the Executive Team and new faces on the ABI’s Board. With the addition of a Consumer Committee chaired by Baroness Nicky Morgan, and a new Consumer Advisory Group, the ambition to inject independent voices into our discussions has brought fresh perspectives to our work.
Today, the ABI has published a three-year strategy and its new purpose:
Together, driving change to build and protect a thriving society.
As the CEO of the largest mutual in our sector, I am passionate about organisations having a strong social purpose. In the insurance and long-term savings industry, we are in a privileged position - most of us find it easy to be passionate about our purpose because what we do really matters in the lives of millions of our fellow citizens.
At the heart of the ABI’s work are three societal outcomes:
To be trusted by customers
To be invested in people and our planet
To work within an effective market, with a legislative, regulatory and tax framework that unlocks the full potential of our sector.
The ABI’s new strategy represents a real step-change in our commitment to tackle the challenges facing the UK. There is a significant role for us to play in helping the Government to deal with its over-flowing in-tray. We stand ready to do that.
Collaboration
There is, perhaps, no greater example of how change and collaboration - my second ‘c’ - can work in tandem for the greater good of the UK than Solvency II reforms. After several years of consultations and collegiate working between industry, Government and regulators, a final set of reforms was announced in November. We strongly welcomed the package set out by the Chancellor. The need to unlock investment that can filter through into green infrastructure – to make the UK energy independent and to reach Net Zero – has never been greater. Neither has the need for more social and ecological housing or regeneration across all parts of the UK.
There is another example of collaboration from last year that I’m hugely proud of – the Pension Attention campaign, fronted by the British rapper, Big Zuu.
I won’t lie: my record collection is more likely to include 80s music than 20s grime – more Yazoo than Big Zuu, if you like.
But if utilizing a more novel approach can produce results where one fifth of the population saw the campaign, and over 90% of these people subsequently engaged with their pension, then I’m all for it. We saw it clearly in our numbers at Royal London – there was a definite pick-up in customer engagement during and after the campaign and you’ll be hearing more from the Pension Attention team this year.
Staying with the topic of pensions and collaboration, it’s an important year for our work towards delivering pensions dashboards, as providers start to submit data to the programme. Given the financial pressures facing households and savers, it’s more vital than ever that we connect people with their savings and help them understand what their future retirement could look like.
Collaboration is at the very heart of the ABI, and this spirit has again underpinned much of our work in the past year:
- We published our Climate Change and DEI Roadmaps, which set out how we can lead the way on these two vital topics. If we are to truly drive change as an industry, it will need our collective attention. Much remains to be done, and we will have more to say throughout the course of this year.
- We continued to collaborate on social care. Last year, I mentioned our role in working with Government to help people prepare for any future care needs. The ABI recently published research which considers the barriers and potential solutions to using insurance or pensions to pay for care. And I support the call that we should make best use of the delay to the reforms to find the most appropriate way for our industry to help.
- And, crucially, on cladding and fire safety, our dedication to supporting leaseholders, and working with Government and the FCA to help address high insurance costs, is unwavering. The ABI is developing a scheme with reinsurers and work continues as a priority to progress this.
Commitment
Finally, commitment.
Fundamentally, this means committing to do the very best for our customers. Over the past year, the ABI’s new Consumer Committee and Consumer Advisory Group has been looking at what more needs to be done to increase trust and transparency.
In January we saw the introduction of once in a generation pricing rules in the general insurance market, and, this summer, the Consumer Duty will start to be implemented. Ensuring that customers fully understand what they’re purchasing remains a vital task.
Today, the ABI has published a report and toolkit from Fairer Finance, that sets out the steps firms can take to provide clearer communications to customers. We’ll be hearing more on this from James Daley, as well as from Plain Numbers’ founder Mike Ellicock, later today. It is an area where we can all continue to strive to do the best we possibly can. However, our commitment to securing the futures of our customers cannot be achieved alone. Whether it’s looking at how we can improve automatic enrolment to bring more people into pension savings or demonstrating how the health and protection insurance sector can help maintain a thriving workforce and support the NHS or ensuring the UK is prepared for any future systemic risks – be that cyber or another pandemic - we need to work in partnership with Government and regulators to be ready for the challenges of tomorrow. And we are committed to doing so.
I recognise there is a risk this sounds like one long shopping list of activity but, in reality, it reflects the numerous ways in which our sector underpins the economy and wider society. We are facing significant challenges that need our collective resolve and collaboration.
Our industry might be hundreds of years old but the mission has never been more relevant.
As my Presidency ends later in the year, I will continue to champion these important issues and I look forward to continuing to work with you all to achieve our shared goals.
Thank you for listening.