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The Actuary The magazine of the Institute & Faculty of Actuaries

Reputation top of agenda for ABI head Thoresen

The insurance industry has a key role to play in helping UK consumers manage their financial commitments, but first it needs to improve its reputation, according to Association of British Insurers (ABI) director general Otto Thoresen.

Speaking at the ABI Biennial Conference, Mr Thoresen’s call coincided with a KPMG survey of 57 insurance leaders, which highlights concerns about the new regulatory structure, the influence of the EU, and shows that reputation is seen as the industry’s biggest weakness.

"The reputation of UK financial services firms was undoubtedly harmed by the banking crisis. Insurers are not banks," Mr Thoresen said. "Despite the valuable role insurance plays in millions of people’s lives, the public perception of our industry is not high. We need to do something about this."

The survey shows what executives think about the strengths of the industry and the impact of regulatory and economic pressures. It was conducted alongside the ABI’s quarterly consumer survey of over 2,500 UK adults.

Industry leaders believed that the industry’s greatest strengths were helping customers at their time of need (39%), and its contribution to the economy (21%). But its reputation was felt by a third of people to be its greatest weakness and two-thirds of executives recognised that more needs to be done to show customers that it delivers a good service.

Almost half of industry leaders thought that the new UK ‘Twin Peaks’ regulatory structure would do nothing to improve customer trust, and 98% of industry leaders were worried about the impact of the EU on the UK market.

Doubts also emerged about the competitiveness of the UK as a location for insurance business. Over half of the executives surveyed did not put the UK in their top three locations to base their business, based on the tax and regulatory regime.

"The insurance sector is undoubtedly facing a period of unparalleled change," said Drew Fellowes, UK head of insurance at KPMG. "From a strategic point of view, the big question remains around where future growth will come from - a feat not to be underestimated in these challenging times.

"Regulation has clearly risen to the forefront of the agenda, which comes at a time when many insurers face significant market pressures. Their challenge is to manage this in line with their strategic priorities and duties to shareholders and customers."