Gibraltar ‘crucial’ to help solve customer affordability issues in insurance

Gibraltar will be “crucial”  in solving customer affordability issues in the insurance sector.

That was according to ABI director of general insurance policy Mervyn Skeet, who said that it was important for the UK and Gibraltar to work together to overcome challenges.

Amid economic headwinds such as inflation, prices have been rising in different lines across the sector.

For example, data published by Confused.com and WTW earlier this month (16 January 2024) showed motor prices surged by 58% in the last year, with UK motorists now paying £995 on average for premiums.

And a week earlier, Pearson Ham revealed that premium pricing for combined buildings and contents policies grew by 7.8% during Q4 2023.

Such growth meant that over the past 12 months, the most competitive premiums increased by 40%.

Skeet said ”affordability is clearly a priority for us and our members”.

However, he added that while some could say this ”was one of the most difficult times to be insurance”, he would argue that ”insurance is one of the most exciting places to be, particularly in motor insurance”.

Speaking during his keynote speech at the InsurConnect Gibraltar conference, Skeet told delegates: “Gibraltar will be crucial to help the industry solve the dilemma of customers struggling with affordability. 

“What strikes me about Gibraltar is the tenacity of the people I’ve met. Despite what is a very challenging global macroeconomic environment brought to us, the insurance industry has proven that it is resilient. 

“As the industry continues to grow, it makes it even more important to create opportunities both here and in the UK to work together.”

Consumer Duty and talent

The ABI is currently working with a group of members to understand what it can do to address affordability challenges.

It is also looking to help insurers through the new Consumer Duty regulation, which has placed a slew of requirements on firms operating in the UK insurance market.

One of these requires companies in the sector to ensure that their products provide fair value to customers.

Skeet said “there are important learnings to be shared, particularly around price and value”. 

Meanwhile, in terms of attracting the right talent, he said that the insurance sector should be more “visible globally”.

Attracting talent to the insurance sector has been a persistent worry for businesses, with what seems like the majority of insurance professionals acknowledging that they ‘fell’ into their current careers, rather than proactively choosing to pursue roles in the industry.

Skeet felt that should firms not be able to “shout from the rooftops” about the benefits of working in the industry, it could have an impact on attracting talent.

He said: “If we don’t do that, we can’t attract the best talent into the industry. If we don’t attract the best talent into the industry, where’s the future?.”

In turn, he felt the industry “must do a better job” of making sure that what happens in insurance is spoken about more outside of the sector.