The Financial Conduct Authority (FCA) wants to be seen to be acting tough on risky products following the crash of the financial services industry, leaving insurers with the acute need to regain public trust, the Association of British Insurers (ABI) chairman has said.
In his opening speech at the ABI Biennial Conference yesterday Tidjane Thiam - who is also group chief of Prudential - told delegates that he uderstood the regulator's keenness to remove bad practice from the financial services industry, but claimed that the insurance industry was sometimes targeted unfairly.
He said: "We are part of a financial services industry and there is no hiding of the fact the industry has suffered significant loss of trust in recent years and that has impacted, sometimes unfairly, our sector.
"We must not be in denial about the crisis and the strength of feeling it has generated among the general public and also our customers.
"In this new context regulators are understandably keen to minimise the risks put by our sector. They want to be seen to be taking action against what are popularly regarded as the excesses of the industry."
"We and I can point out at every opportunity that insurance companies are not bad.
"However we must also recognise that this line of argument has unlimited impact on the public."
In order to overcome the effects of interventionist regulation, insurers have to make it a priority to regain the public trust undermined by the crisis, Thiam said.
"There is only one long term job to observe and that is to do the maximum job for customers.
"The question is this product right for the customer should be the first we ask ourselves. It should be second nature to us and to the people to whom we sell.
"Unless we are confident that the product being sold to a customer is right for their needs we cannot call ourselves a consumer friendly industry."
The ABI has identified seven challenges that will shape the future of the insurance industry in its report Identifying the Challenges of a Changing World.
They include the digital revolution, global convergence, the continued effects of the financial crisis, an ageing society, political challenges, climate change and interventionist regulation.
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