BROKERS’ MONTHLY 11

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BIBA CONFERENCE 2009
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BIBA CONFERENCE 2009
will ultimately reduce customer
brokers were vital in this. It was no
challenges we face. A healthy
choice and access to advice at a time
coincidence that the UK had one of
insurance sector is one of the key
when it is needed most. We must see
the most innovative and competitive
ingredients of a healthy UK
cost-effective, value-for-money
general insurance markets – and also
economy.”
regulation where any increases are
had one of the strongest insurance
Finally Mr Galbraith had a
fully justified. BIBA will be
broking sectors.
message for the insurance industry
watching.”
His message to the political
itself – for the people running
Mr Galbraith also had a message
establishment was that the UK’s
businesses both large and small. “If
for government. The credit crunch
insurance sector had the ‘X factor’.
you want our sector to be heeded at
had served as a powerful reminder to
“If you want to see a truly world-
the highest level: one voice, one
government of the benefits brought
leading sector, then here it is. We
message. The greater the clamour, the
to the UK economy by a strong
invented much of the practice of
less the message will be heard and
insurance sector, he said.
insurance; we developed it; and we
understood.” The insurance industry
Competition and innovation in
continue to set the pace
needed to work more closely, and
financial services were crucial,
internationally. Recognise our value
BIBA would be an advocate for
particularly in general insurance, and
and help us respond to the global
enhanced co-operation.
“Delivering Value” Debate
about 30,000 complaints relating to PPI policies, and the
T
he TV presenter and business guru Rene Carayol
chaired a debate among five industry representatives
IOB had upheld about 90% of them. “There’s a nasty story
on-stage, with pre-filmed questions and some
there, and it’s besmirching the otherwise good name of
audience participation. He raised the question of
insurance”. Now was the time, he said, for the insurance
developing regulation and a fear of some “heavy duty,
industry to be making representations to the FSA as to the
industrial strength” regulation beginning to emerge.
type of regulation that it believed would fit.
Jeremy Hills from FSA said that for the larger, complex,
A comment from the floor raised the question of the
systemic institutions, “we got it wrong”. For the future,
arbitrary limit of £1m turnover currently placed on
“…. Some of these larger institutions need to fear us. We
companies’ ability to claim compensation. Jeremy Hills
will be much more challenging; we need to raise our
replied that it was difficult for the marketplace to decide
game.”
just what it wanted for compensation. But if it was
With smaller firms “…. We want to hear what your
generally considered that the compensation limits were
issues and concerns are, and we need to be more effective
inappropriate, it was for the industry to put forward a case.
in that.” Roadshows were an opportunity to hear from
But the compensation scheme was paid for by the industry
smaller brokers about their concerns.
itself, he added.
Sandy Scott of the CII referred to the FSA as a
Should the FSA have acted more quickly in the
“wounded animal”. Its operations would be reviewed after
banking crisis? The question was put by a delegate who
the next election. “Politicians were powerless in recent
asked if that would have any backlash to the insurance
events; they will regulate to get power back. Whether that
industry.
will be through the FSA or some new incarnation, I don’t
Jeremy Hills replied that the FSA acknowledged that it
know.” So now was the time to follow Eric Galbraith’s
should have done things more effectively across the
advice and get the industry speaking with one voice.
banking sector. “We have probably been supervising some
Mr Hills added that it was important that, in
of the larger firms on the cheap. We probably have not had
developing more appropriate regulation for larger firms,
the skill set or the number of staff to review and analyse
the FSA entered into dialogue with trade associations like
these large and complex institutions more effectively.”
BIBA. There had been some advances made in areas like
Some 200 extra staff were being taken on.
commission disclosure. It was important to get the
Nick Starling pointed out the risk that politicians in
balance right between rules and regulations on the one
the UK and Europe would drag insurers into the sort of zeal
hand and industry solutions on the other.
for regulation that was being directed at the banks. “We
Nick Starling from the ABI disclosed that he had
do need an outcome-focused risk-based regulatory system
been a regulator himself and one precept he had learned
for insurance that allows innovation and risk-taking.”
was the importance of focusing on risk and outcomes.
Encouragement for the FSA came from Philippe
“What is the thing that might go wrong, and, if it does go
Maso, chief executive of Axa, who said, “The job that the
wrong, what might happen?” As previously pointed out,
FSA does for this market is absolutely outstanding when
not a huge amount went wrong with insurance. He hoped
compared with the way other regulators work in other
that, when a new IMD was drafted, that would be taken
markets. …… My big fear as head of an insurance
note of.
company here is that we try to put in place new
Walter Merricks, Insurance Ombudsman, added
regulations to try to win the battles of the past in the
that unfortunately there are some things that do go
future.”
wrong in insurance. They mostly related to policies of a
He went on to say, “Let’s not carpet-bomb all the
type that were not largely sold by insurance brokers, but
industry to capture some very specific practices we want to
by the banks. In the last nine months there had been
get rid of.”
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