There's no doubt the insurance industry is facing challenging times at the moment. What with stock ma...
So why do we stick around? Of course many insurance companies have been around for hundreds of years and we have seen plenty of highs and lows.
The important thing for us and our customers to know is that we are here for the long term and that we can generally ride out the storm. That is the nature of insurance and particularly for long-tail classes of business, it's vital this attitude prevails.
I believe insurance is a sound business to be in, but that comes with two provisos. Firstly, in difficult conditions we must get the fundamentals right. By this I mean responsible underwriting, risk management and claims control.
Secondly, we must persuade policymakers that our industry is not a charity.
We have a responsibility to manage the risk pooling process as effectively and efficiently as possible. However, once events become a certainty rather than a risk, insurance is generally not the answer.
I'm concerned the government appears to view us not as an industry that has a legitimate right to make a profit, but rather as a deep pocket that can constantly be dipped into. For example, the Department of Health's recent announcement that it intends to consult on the introduction of NHS clawbacks for accidents at work is extremely badly timed, given the recent problems in this market. I am calling on the government to postpone this measure until a wholesale reform of employers' liability insurance takes place and call on other members of the industry to do the same.
We must get the message across to government that it's not insurance companies that pay ultimately, it's policyholders - the individual consumer - and they must make their policy decisions with these people in mind.
Otherwise insurance will become unaffordable to all but the wealthiest.
If society wants higher levels of compensation then so be it - we are the mechanism for that. But society and government must begin to understand this is a cost that gets passed on by the insurance industry.
Overall, though, there has been a market shift I don't think will reverse in the medium term and that requires insurance companies to make an underwriting profit. This is in everybody's interest. If you like a challenge, it is worth sticking around.
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