“The insurance industry needs regulation, but it has to be proportionate,” says Aviva group executive director Patrick Snowball
“The insurance industry needs regulation, but it has to be proportionate,” Aviva group executive director Patrick Snowball said today.
Speaking at the Insurance Institute of London lunchtime lecture at Lloyd's, Snowball told delegates that it was imperative to get the regulatory balance right for the insurance industry. “The most insidious thing is that [over regulation] creates risk aversion, and we simply stop taking risks,” he said, a fact which will only hurt the customer.
Furthermore, he warned that over regulation would result in what he described as “a grey, monotone industry” in which the “good people” will simply leave to work in other more attractive market sectors.
In assessing what level of regulation is required, Snowball said that it was important to establish what constituted “customer detriment” in order to avoid the risk of regulation becoming “routine interference”. However, he warned that if the industry failed to address such issues, “someone else is going to address them for us.”
Asked whether he believed that the Financial Services Authority was listening to the concerns of the industry, Snowball responded that they were listening, adding: “They are having to listen because increasingly one can demonstrate the benefits and the equally the pitfalls of regulation.”
He did however raise concerns about a lack of “joined-up thinking” in relation to regulation, with on occasion one initiative coming from one side and a related initiative from another, when a combined initiative would be the most effective solution.
Concluding, Snowball reiterated his point that he was confident that the FSA was taking on board the concerns of the insurance industry.
