Insurance ‘crucial’ to rebuilding economy

Eric Galbraith, Biba’s chief executive, has called on the government to recognise the value of the insurance industry and to help it respond to the global challenges it faces.

Speaking at last week’s annual Biba conference in Manchester, Galbraith said that a healthy insurance sector was crucial to rebuilding the UK economy.

He also urged the FSA not to lose sight of the low risk that insurance brokers presented to consumers and the economy, warning that any more regulation would reduce customer choice and access to advice at a time when it was needed most.

“The FSA has now had nearly four-and-a-half years to get to grips with our sector and gain a full understanding of our workings,” he said.

“But still the question lingers: we know insurance brokers pose little risk to consumers or the economy; the FSA knows brokers pose little risk to consumers or the economy; so why does the regulator insist on imposing such heavy burdens on us?

“Insurance intermediaries, by the FSA’s own admission, pose less risk than any other category of firms it regulates.

“This is borne out in part by the very small volume of complaints and compensation claims we generate.”

He argued that the responses to the past year from the industry, the government and the regulator would shape the insurance industry for much of the next decade – and he urged it work more closely and to speak with a single voice.

He said that the association had three key issues for the coming year.

“To government – you have a winner in the insurance sector; value it. We have the X Factor you need.

“To the regulator – stop using a sledgehammer to crack a nut. Proportionate, cost-effective regulation is what the insurance sector needs, and soon.

“To the insurance sector – we must speak with one voice in order to protect our sector, and to better serve customers.”