ABI launches "big debate" over industry's future

The ABI is calling for a new “social contract” between insurers and the government as it releases a report on challenges facing the industry to coincide with its biennial conference today.

The association aims to use the 40-page report, which outlines seven major challenges facing the industry over coming years, to launch a “big debate” among insurers on how to deliver better solutions for customers.

ABI director general Otto Thoresen said: “Our report marks the start of a debate in the industry and with other stakeholders about what action is needed to cope with, and take advantage of, the huge changes we all face.

“The rules of day-to-day life are being rewritten, and insurance has a key role to play in tackling many of the issues that matter for society. Insurance providers cover against risks inherent in all aspects of life – from safeguarding our homes, and businesses, protecting against illness and death, to providing income in retirement.

“Our recently agreed Flood Re deal with the government is an example of how insurers, working with government, can develop solutions to the challenges we face. In other areas, such as pensions, we need a new ‘social contract’ with government to reflect the shifting boundaries between state and private provision”.

The seven major challenges of a changing world identified in the report are:

• The digital revolution;
• An increasingly interconnected and balanced global economy;
• The development and recovery of Western economies after the financial crisis;
• Global ageing;
• The need for insurers to take a more proactive and visible approach to public policy;
• Interventionist regulation;
• The continuing impact of climate change.

The seven challenges will be discussed at the conference’s two plenary sessions and in other panel debates.

“What we have done in this conference and this report, is to look into the future at the key challenges the industry faces and then say: How can we tackle these?,” an ABI spokesman said.

Findings of an ABI-commissioned survey of 2,500 adults that were released with the report found that many families remained financially unprepared for the future and some adults did not believe they would ever retire.

More than half of respondents felt they or their family would struggle if they were seriously injured, had a serious illness or the main breadwinner were to die and 57% did not have life, critical illness or income protection insurance.

One in five adults under retirement age felt that they would never retire, while 41% of the remainder felt they would continue to work part-time. Fifty-two per cent of respondents felt the government should have primary responsibility to pay if someone lost their job, became disabled or had a long-term illness.