'The eurozone crisis is closer to home than many insurers might care to admit'

As our cover story infographic shows this week, the eurozone crisis is closer to home than many insurers might care to admit. If Italy or one of the other larger European states defaults on its debts, the consequences will be catastrophic for those insurers with significant exposures on the continent.

Of course, a middle way is more likely; a solution whereby the eurozone states are propped up by a central fund, requiring further austerity measures and a subsequent return to recession.

In either scenario, European insurers with UK holdings may well have to raise cash. If their assets in this country aren’t core to the rest of their business, a sale seems a sensible option (and even more so when the assets are brokers rather than insurers, as is the case with AXA and, more significantly, Groupama).

Meanwhile, great news from the ABI’s motor conference this week, with the commitment to have DVLA information made widely accessible to the insurance industry from the beginning of 2014.

This will revolutionise the purchase of motor insurance, allowing insurers and brokers to stamp out the major cause of application fraud literally at the press of a button.

Welcome though the measure is, it does raise bigger questions. The industry seems to be moving towards a world where customers’ data can be held centrally and checked by any interested parties. Credit checks are already becoming common in the rating process, and there has been talk of one day establishing a centralised bank of telematics data.

Any of these measures have serious and worrying implications for customer privacy and the security of personal data. The industry must recognise and address these now, or face a public backlash further down the line.