The director of ABI’s general insurance policy on the main areas of intervention for 2021

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The industry has risen to the challenge, he said, as evidenced by customer commitments to those who work from home or use their cars to volunteer, and raising over £ 100million for the COVID-19 Support Fund. The ABI worked with independent healthcare providers to support the NHS and began negotiations with the government which resulted in a trade credit reinsurance program helping businesses continue to trade, as well as an agreement to ‘time-limited compensation to help nursing homes care for COVID-positive patients. .

Looking at the work being done across the association, Dalton noted that on occasion the ABI has had to hold a mirror up to the industry to reflect on the learnings. There is a lot that anyone can learn from the past year, he said, and it is to be expected that these new understandings will continue to be both reflected on and implemented. As for some of the key areas of focus for 2021, the focus is on improving customer confidence, transparency and product simplicity.

“It is often said that claims are the showcase of the insurance industry,” he said, “so it is essential that we redouble our efforts as an industry to pay valid claims quickly and with confidence. a simpler customer journey. But lessons learned from COVID-19 can also be part of a wider dialogue about the role industry can play in helping the UK economy recover. Considering all of this, there are a few opportunities we need to seize this year. “

First, he said, the FCA’s consultation on IG pricing practices represents a unique opportunity to fundamentally improve the way insurance products are priced, bought and sold. There must be a market where consumer loyalty is not punished and where constant buying purely on price is not unduly rewarded. The quality of the product and whether it meets the needs of the consumer are just as important as the price. ABI therefore fully supports FCA’s attempt to implement a system where customers focus on product suitability and quality.

Dalton stressed that climate change is also a key focus area for the ABI and its members. 2021 will be a pivotal year for global efforts to tackle climate change as the UK prepares to host COP26 and the long-term insurance and savings industry must play its part. Insurers have a key role to play in helping people manage the risks of climate change, including floods, forest fires and crop failures.

“[However], insurers are also major institutional investors, “he said,” with the capacity to spur the growth of renewable energy and the sustainable infrastructure needed to mitigate global temperature change. We want to ensure that insurance is at the top of the list of industries in the economic transition to a net zero economy, so we will be working closely with government, regulators and climate experts to ensure that the potential of our sector to achieve this goal is achieved. “

Read more: ABI Chair on Solvency II: “Our ambition is sensible reforms”

Another important opportunity is the Solvency II post-Brexit review. Dalton revealed that an independent analysis carried out for the ABI by KPMG found that £ 95 billion could be released for reinvestment or redeployment if reforms are made to the corresponding adjustment and risk margin. As it stands, he said, it’s much easier to invest in a well-rated mining company than to invest for 30 years in a wind farm – and the association wants the rule to change. to allow investments, managed by insurers, to focus on a wider and greener range of assets.

“More broadly on Brexit issues,” he said, “the industry has done a lot of work to make sure it is ready for the transition, but there are still non-trade issues to be addressed. We continue to press the Commission to allow the UK to (re) join the green card free movement area, removing the requirement for UK motorists and carriers to carry a green card when they travel to the EU. We also want the Commission to recognize the UK as equivalent for reinsurance purposes. “

ABI’s research has shown that a large majority of the public believes that insurance products will become more important to them in the months and years to come, Dalton said, whether it’s protecting their home, their health. and their cars, or by protecting their business. by recovery. It also shows that as economic challenges continue, the insurance industry will become increasingly important in providing a sense of security and protection for the financial future of consumers.

“Insurance will also have a vital role to play in rebuilding a more balanced economy, not just greener, and the economic contribution of industry is a key opportunity for our sector,” he said. “The core purpose of insurance has always been to provide people with a safety net and to provide support during the toughest times. As we seek to rebuild the UK economy in the wake of the pandemic, it will be important for all of us to remember this fundamental goal. “


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