Government outlines plans to develop insurance industry

The UK insurance growth action plan, announced by government, is set to help cement the UK’s position as a global leader in insurance and encourage the industry to invest more in the British economy.

Six insurers – Aviva, Friends Life, Legal & General, Prudential, Scottish Widows and Standard Life – have also agreed to invest £25bn in UK infrastructure over the next five years.

Chief secretary to the Treasury Danny Alexander said: “The announcement today that six major insurers will invest £25bn over the next five years is a massive vote of confidence in the UK economy. It supports the wider £100bn public investment to rebuild Britain over the next seven years that I announced at the Spending Round 2013.”

ABI director general Otto Thoresen said: “Insurers have a key role to play in contributing to the UK’s economic growth, as providers of long-term capital investment.

“Providing capital for infrastructure projects will help drive a competitive, healthy and resilient UK economy.”

The plan also identifies actions in five key areas where government and the industry should focus attention:

• the UK industry in overseas markets;
• the UK as a location for insurers;
• insurers as long-term investors in the UK;
• serving UK insurance customers; and
• skills and diversity in insurance.

In a foreword to the plan chancellor of the exchequer George Osborne wrote: “The government’s objective is to continue its strong partnership with the insurance sector, strengthen its contribution to economic growth and work together to enhance the UK’s position as a global leader in a truly global industry. This document sets out the measures we will take to deliver this objective.

“The measures identified in this action plan are the right ones to maintain and strengthen the sector’s competitive position. They reflect not only the size of the challenge but also the scale of the opportunity, as well as the aspirations of the government and the insurance sector itself to equip the UK for success in the global economy.”

Biba executive director Graeme Trudgill said:“We welcomed the publication of the government’s Insurance Growth Action Planand will be working with HM Treasury to implement the recommendations over the next 12-18 months. We hope the Chancellor’s Autumn Statement will go beyond the well documented discussions around business rates to include a package of ideas that result in better outcomes for consumers and the economy.

 “As an organisation that is proud to count 85% of our membership as SMEs with 10 or fewer members, the commitments we are looking for are around the cost of living, delivering growth to the economy, helping consumers and creating a more competitive regulatory environment.”

You can read a copy of the plan here.