Boris Johnson has been described as a ‘consumer champion’ by some, so what will this mean for the insurance industry
As the UK anxiously awaited the announcement for the next prime minister, the insurance industry remained realistic yet hopeful.
Boris Johnson beat Jeremy Hunt to the post with the majority 66.4% of the vote. Johnson vowed to deliver Brexit and unite the country in his acceptance speech.
But the ABI stated that the incoming prime minister would also inherit “a huge set of challenges”.
Outgoing PM Theresa May caused “unprecedented uncertainty” for the insurance sector by failing to exit by the agreed deadline. And Huw Evans, director general of the ABI, told Insurance Times that “we should all hope that he will be able to overcome the current impasse and implement Brexit in an orderly fashion, with a transition period in place”.
Rule-taker
“The crucial longer-term test is whether our future economic relationship with the European Union avoids the UK’s world-leading insurance and long-term savings sector becoming a rule-taker,” Evans continued.
“Beyond Brexit, we want to see the incoming prime minister and his new government support our thriving and world-leading industry by improving the competitiveness of our tax and regulatory environment, boosting savings for retirement, keeping the cost of insurance down, improving the safety on our roads, and building a social care system that works for all.”
Consumer champion
Attention is now turning to who will be in Johnson’s cabinet. David Gauke, the Justice secretary and Lord Chancellor who disappointed insurers by reseting the Ogden rate to -0.25% had vowed to resign if Johnson became PM. However, one of those already being tipped for a top job is Liz Truss, who hit insurers hard when she was Lord Chancellor by cutting the Ogden from 2.5% to -0.75%.
Matthew Maxwell Scott, executive director of ACSO (The Association of Consumer Support Organisations) labelled Johnson a ‘consumer champion’ and said he was hopeful Johnson would keep up this reputation.
He said: “In his time as London mayor, as well as in his comments and columns over the years, Boris Johnson has shown himself to be something of a consumer champion, standing up for competition and customer service.”
ASCO hopes Johnson “will do his bit for insurance customers” in the period ahead.
He explained that this meant not least by considering the needs of those who need to claim against their policies.
“The willingness of previous administrations to be swayed by the siren voices of producer interests should not be repeated,” he warned.
Eliminating uncertainty
But among brokers, the main thing they are hoping for is for the Brexit situation to be resolved to remove uncertainty in the market. The Brexit process has already had an impact in reducing M&A appetite.
Simon Mabb managing director at Romero Insurance brokers, told Insurance Times: “In our minds, the most important thing for us as brokers and the wider industry is for there to be a conclusion to the current situation to help eliminate uncertainty and allow businesses to plan for the future.”
Mabb explained that this lack of certainty isn’t good for the economy or the insurance sector in general.
“There are also other very important issues that simply aren’t getting the airtime they deserve in parliament,” he said.
Transition
Biba agreed that its members needed certainty but suggested a transition period would help. Steve White, Biba’s chief executive, explained that it is not a political organisation, but it does have to work closely with government MPs, ministers, civil servants and advisors.
This is to represent brokers and to deliver Biba’s Manifesto commitments and calls to action.
“With that in mind we are pleased that the process to choose a new leader of the Conservative Party and Prime Minister has concluded. What we need to begin to see to deliver what our members and their customers need is a degree of certainty, preferably though agreeing a deal with the EU that will allow for a transition period in which the detail of how UK brokers can continue to provide services to EU customers can be worked out.”
White concluded that Biba is now looking forward to building relationships with the new government, which will be formed and also working with them on its members’ issues.
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