Who's sticking up for the insurance industry?

HM Government – in the form of Treasury minister Greg Clark – has declared its undying love for the UK’s insurance industry. The Times quoted Mr Clark as saying: “Insurance companies employ almost 300,000 people, they contribute over £10bn in taxes and [on the life side] administer to investments amounting to more than a quarter of the UK’s total net worth.” Mr Clark promised to bring forward proposals in due course.

Of course, the Government’s support for our industry is good news, although why wouldn’t it support one of our most successful industries?  Yet what about the general insurance industry itself? Does it deserve such effusive praise?

Both Aviva and RSA, the UK’s largest insurers, have slashed their dividends, hardly pleasing their investors, while the FCA is keen to see improvements to the customer experience, especially for claims.  The industry suffered significant reputational damage after Jack Straw MP’s referral fees campaign, the so-called ‘dirty little secret,’ and more recently, up to 600,000 homes may be uninsurable after Government and industry disagreed on replacing the statement of principles on flood insurance.

Robert Hiscox has repeatedly called for the ABI to split its general insurance and life insurance into different operations, partly due to a perceived life bias, something the ABI has done little to dispel given its chief executive and chairman are both life people. The CII has a strong focus on qualifications and improving standards – a worthy long-term aim – but not of much interest to the public.

In the wake of his well-received speech to BIBA delegates, new BIBA chief Steve White has an excellent chance to create a leading position for his organisation and the brokers he represents. And, the ace up Mr White’s sleeve is localism. Unlike big providers, lurking in their hubs, brokers can claim to be the true representatives of the communities in which they work. 

Community broking is not just selling insurance to businesses – brokers can harness their links to the rest of the business community (HR, marketing, accountancy, legal etc) and help their clients in the same way that banks used to do before greed took over.  There is an opportunity for community brokers to be the facilitators of so much more in their business community than insurance.

They should be the hub of that community, doing what their name suggests - broking relationships and helping their clients get all the business support they need. Clients should feel able to come to the community broker seeking advice on many aspects of the management of their business. If the broker cannot help directly, he can help them using other professionals.

Not only is this good for brokers’ business per se, but the growth in local influence will give Steve White and BIBA added leverage at the heart of Government.  MPs will listen, and more importantly act upon, the opinions of organisations whose members truly bring jobs and prosperity to the communities they serve.