Flooding, fraud and asbestos: ABI outlines 2012 priorities

27/01/2012

The Association of British Insurers has outlined the key priorities for 2012 to reduce insurance costs including seeking a free market flood model and dealing effectively with asbestos claims.

Other topics highlighted included fraud, the rising cost of motor insurance, risk pricing and regulation.
In a presentation at Lloyd’s this afternoon, director general Otto Thoresen called asbestos a “vivid example of the long term nature of insurance” and urged the industry to handle such claims effectually.

“Here we are dealing with the consequences of problems from the 1950s and 1960s which are not of today’s making,” he explained. "It’s a clear example of changing standards and expectations of people – and how our long term insurance cover needs to be able to accommodate these.

“Our priority for dealing reasonably with asbestos, is to ensure that people who contract this horrible disease, mesothelioma, can trace an insurer where there is one – and seek compensation quickly.”

Referring to flooding as “the biggest catastrophic risk facing the UK”, Thoresen urged government to replace the Statement of Principles with a free market and support model financed through general taxation.

Over the next 12 months the ABI will be working with its stakeholders and government to find solutions to the high cost of motor insurance; and to access the DVLA’s database “so that dishonest customers can no longer tell lies about endorsements”.

The ABI was seeking a resolution on tax.

“Seeking a sensible outcome on the controlled foreign companies tax regime is also a key priority – one made ever more difficult against a backdrop of a tough government fiscal position,” he conceded.

He added it was crucial risks are priced accordingly and to ensure government and Europe did not interfere; but yet maintain strong alliances with European players among the on-going regulatory reform.

“We now face a situation where our European colleagues are more aware of anything we want to negotiate which could look like special treatment for the UK,” he explained.

“It is incumbent on us to maintain strong alliances and to make a strong case for change to those rule changes which could hinder rather than help.”

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