In December, HM Treasury published its action plan for UK Insurance growth
In December, HM Treasury published its action plan for UK Insurance growth. This sets out its stated priorities for the sector for the next 12 to 18 months. The report states that the Government has five main areas of focus:
- The UK industry in overseas markets
This will be evidenced by the development of a co-ordinated, targeted approach to help firms grasp opportunities in emerging economies, in particular in Brazil, China, India, Indonesia and Turkey, including by promotional activities and prioritising financial services and insurance within upcoming free trade negotiations.
- The UK as a location for insurers
The Government wants to attract overseas insurers into relocating to the UK. Means to this end include a commitment by the regulatory authorities to streamlining the authorisations processes for prospective insurance applicants; UKTI developing a marketing campaign to target insurers to move their domicile to the UK; and growing the market in commercial Islamic insurance.
- Insurers as long-term investors in the UK
The report cites the recent developments in Solvency II as providing a stable basis for insurers to now commit to investing in the infrastructure of the UK, “both for the benefit of their policyholders and the UK economy as a whole”.
- Serving UK insurance customers
The Government wants insurers to help customers manage risk, to put customer first “by harnessing the power of new technology and creating products that meet their needs”, and to gain customers’ trust and confidence. The report references the many sector reviews that the FCA has or is undertaking (see below) and also suggests that it may instigate amendments to the implementation of the Consumer Credit Directive to permit the payment of insurance premiums by instalments to fall wholly outwith the regime.
- Skills and diversity in insurance
The Government encourages initiatives from the insurance industry to develop apprenticeships and graduate training places and to increase the number of senior female executives in the making.
We understand that the Government is particularly keen on the third of the areas above: encouraging insurers to invest in the UK’s infrastructure. During the later part of 2014, the PRA and the FCA are due to publish their policy statements on the transposition and implementation of Solvency II. It will be very interesting to see if this aspiration is carried through into giving insurers real incentives and encouragement to invest in this way.