Industry figures are sceptical about the outcome of the Department of Work and Pensions (DWP) review into the employers' liability (EL) crisis and they are predicting that unless the situation is dealt with a "market failure" could be imminent.
Speaking at the ABI conference, director general of the Engineering Employers Federation, Martin Temple, said he feared the DWP, "did not have the heart" to implement the changes needed to make the EL market function effectively.
He said that the industry may have to lobby the Treasury to ensure that systemic change is supported.
John Parker, head of general insurance at the ABI, said the ABI is planning to commission consultants to look at the prospects of a fund for long-tail disease claims, including financially modelling how such a fund could work.
But Geoff Riddell, CEO of Zurich Financial Services and chairman of the ABI's liability committee, said that government support be required.
He described the task of getting the industry to work together as akin to "herding cats".
He said that in the short-term he thought the DWP review could lead to new legislation about legal costs, rehabilitation and enforcement of the requirement for all UK businesses to have EL cover.
