Insurers could help provide care and pensions - ABI

Insurers could play a key role in providing long-term care and pensions to address the needs of Britain’s ageing population, according to the ABI.

Welfare and pensions are two key areas of public policy where insurers could make a greater contribution, as the boundary between public and private provision shifts, the association’s spokesman Malcolm Tarling said.

Global ageing is one of seven major challenges facing the insurance industry over coming years that were highlighted in an ABI report released today to coincide with the association’s biennual conference.

The industry is well placed to strengthen its relationship with the government to meet future challenges following the government’s adoption of Flood Re, the ABI’s plan for addressing the flood protection problem, Tarling said.

“The key thing is that we got the government to accept that it is their preferred option going forward,” he said. “There may be [other] areas where we have to increasingly work with government to tackle some of the problems that this report has identified such as welfare and pensions.

“Most people these days can expect to draw a pension for a longer period than they pay for a mortgage. Average life expectancy is about 85 for the average male and by 2050, it will be 91.

“What we are talking about is some sort of package that addresses the major problems society is facing that involves both insurer input and government input.

“Insurers could have a key role to play in long-term care and insuring pension provision. But there has to be a boundary between the state and the private sector and it is getting the boundary right in the changing circumstances after the credit crunch that is the key issue.”

Tarling said the industry’s relationship with government was “working well at the moment” but “we will probably need to step that up in coming years.” While the ABI did not have a template of exactly what an expanded relationship would include at this point, regular meetings with government would be involved when they were needed.

“With Flood Re, we had Oliver Letwin (pictured), minister for government responsibility, who co-ordinated the government’s response, which stretched between The Department for Environment, Food and Rural Affairs, the Treasury and other departments.

“And we would like to see a similar ministerial point of contact to bring together different government departments on other issues such as pensions, as and when they arise,” Tarling said.