The next generation of insurers are ready to reshape the profession post-Brexit
Rising stars of the insurance profession met in parliament to discuss data collection, putting the customer first, and changing perceptions of the industry.
This month the Chartered Insurance Institute hosted its annual New Generation Parliamentary Reception. The ‘New Generation Group’ is the Chartered Insurance Institute (CII) flagship talent programme, showcasing 40 rising stars from across the insurance profession.
Craig Tracey MP, Member of Parliament for North Warwickshire, Chair of the Insurance & Financial Services APPG and ex-insurance broker of 20 years, joined a panel of experts to discuss the future of the sector and how it can work side by side with policymakers, to ensure the industry adapts to, and evolves with, the times.
Insurance and parliament may not seem like a natural fit but, as the audience heard, the sector often is at the forefront of shaping policy that affects every aspect of a constituent’s life.
Craig Tracey MP reflected on the relationship: “When I got here I was made acutely aware of the fact that there aren’t many people in parliament with insurance experience, so given the fact that it is such a big industry – employing roughly 300,000 people, two-thirds of which are outside of London – the likelihood is that every one of our constituencies will be affected by insurance and the insurance industry in some way.”
“We should have more knowledge about it, but the reality is, we don’t.”
Putting customers first
Speaking at the event, Seth Williams of the ABI said that for this next generation of insurers, the focus will be around the treatment of customers.
“Quietly in the background, while Brexit is grabbing headlines, are things like the loyalty penalty, which is being dealt with by the CMA and the Department for Business [BEIS].”
Williams said one of the key goals going forward will be to shine a light on practices that are unfair for consumers and unstainable for the future – as well as ensuring competition in a ‘fair marketplace’.
“There isn’t a simple answer to this. If you cap pricing in insurance, it gets very difficult very quickly. If you look at the energy sector for instance, prices are edging up.”
Vulnerable customers were also identified by the panel as a top priority for the industry going forward.
The MP for North Warwickshire said: “Vulnerable customers often have the least access to insurance or advice. You will always have people who can go online and figure things out, but a lot of people get left behind and those are the ones that you hear bad news stories about.”
He said it was important for the industry to guarantee that those customers always have “an advice service out there that can ensure they are protected when they need it.”
The CII currently has several initiatives under way to raise the bar in looking out for vulnerable customers, such as the Insuring Women’s Futures (IWF) Taskforce.
Lawrence Finkle of the CII suggested that the insurance profession had come a long way in recognising that only through understanding the needs of different groups within society will it be able to fulfil its obligations in meeting them. He added that this approach to engagement is evident in the DWP Disability Champion ‘Access to insurance’ working group, recently convened to improve access to protection insurance to consumers with chronic health conditions and disabilities– which the CII, ABI and a whole host of organisations from across insurance, the disability charity sector and wider civil society are a part of.
Data is essential for the industry, but as Craig Tracey MP recognised, the fears around data collection and usage is currently at fever pitch. “As soon as you mention data the public go in a complete tailspin. I think we need to have a sensible conversation about data and what it is,” remarked the MP.
How best to maintain consumers’ trust when it comes to using their data is a debate that is currently taking place.
“For insurance, consumer data is fundamental, as is its proliferation and use of it. A lot of the time public trust and the perceptions of how personal data is being collected falls far short of the extent to which it is being used by firms at the moment,” said Lawrence Finkle.
Mr Finkle said there is a lot that professional bodies such as the CII can do without requiring new regulation. For example, recently the CII convened their own ‘Digital Ethics in Insurance and Personal Finance’ forum, drawing expertise from across insurance, financial planning, policy and the wider tech sector..
Craig Tracey said he was nervous about the Government’s involvement in trying to regulate the digital sphere as it can prevent technical innovation from flourishing.
“It’s very difficult to try to put things in place [in terms of regulation] that haven’t happened yet. My worry is that we over scrutinise things and don’t allow those industries to grow.”
He admitted that for most members of parliament, advanced technology is a difficult subject.
“Sometimes when legislation comes before us it is completely alien.”
It is for this reason, remarked the MP, that getting opinions on these areas by new generation to shape government thinking is “vital.”
The panel agreed that going forward the industry must shift its reputation.
Seth Williams said an emphasis on the number of jobs created by the industry, especially those outside of London, will help change the narrative. He predicted that this message will be especially important “if we are facing a Labour government that may have a bias against financial services.”
He continued: “Whether it is a Labour government or a rebooted version of the one we have now, at some point after Brexit there will be some form of stability. I don’t think either of them will be far from pursuing the ‘transparency and fairness’ agenda. It will be extreme in some cases – not only because understanding the intricacies of financial services is quite low.”
Williams emphasised that the sector needs to understand that the long-term interest of consumers aligns with the long-term interest of their businesses.
Craig Tracey said that ahead of Brexit is an ideal time to reshape the industry: “The Brexit debate gives the insurance industry the landscape with which to reinvent itself. I think it is such a shame that you tend not to hear all the good stuff that the industry is doing.”
“We are at such a landmark time around [Brexit] that there is a big opportunity to get a lot of new thinking into government and around the industry. When you say to the Treasury that insurance is contributing £12billion in tax revenues, they take that very seriously.”