Daily briefing: Wednesday – Labour conference hard on insurance

The insurance industry bigwigs got a rougher ride than they probably expected when they turned up at the Labour Party conference last night. They were there for a fringe session organised by the ABI to debate the changes to the compensation system that the government is pushing through parliament.

The scene was set for last night’s showdown at an earlier meeting during the day, when ABI director of general insurance and health Nick Starling offered a robust defence of the industry’s position. Claimant lawyers began to talk about round two.

But that was before shadow justice minister Andrew Slaughter opened his mouth. He called for the industry to put its own house in order before demanding wide-ranging changes to the system of civil justice. He also refused to accept that the industry was out of pocket because of legal costs.

David Williams from AXA, who was also on the panel, probably had to bite his tongue hard when Slaughter name-checked Admiral as an example of a profitable insurance company.

Not all insurers are losing money. But enough are – judging by the ABI’s figures published last week, which showed that motor insurers recorded a collective underwriting loss of £1.8bn last year.

The scale of this loss – especially in contrast with other lines of business, which are in the black – point to systemic problems within the motor field.

Williams countered that the motor insurance industry is in a competitive place, a point underlined by figures last week that showed that motor insurance prices were down 2.3% in September.

Slaughter’s comments fit with a new hostile tone within Labour towards business, reflected in leader Ed Miliband’s keynote speech at the conference and business secretary John Denham’s attacks on insurance industry “scams” earlier during the week.

Last week, at the Liberal Democrat conference, the industry representatives received a generally warm reception.

With such crowd-pleasing statements, Labour arguably makes itself less electable. Nevertheless, last night’s meeting gives a taste of what the industry can expect as the anti-Jackson review lobby girds its loins for the upcoming debates in parliament about the Legal Aid, Sentencing and Punishment of Offenders Bill.