Lord Hunt says many risks in society are unpredictable, so the industry must be realistic when it plans for the future.
My parliamentary colleagues have now largely deserted Westminster in search of rest, relaxation and recreation, so I thought I might share a few political thoughts, in the light of the developments of the past year or so.
I have never been especially superstitious, but the 13 months that have elapsed since Gordon Brown became prime minister have certainly confronted him with an unusual degree of adversity. Perhaps, had he commissioned a thorough risk assessment, Mr Brown might never have taken the job in the first place. Certainly, most of the problems that have beset him have also had a direct impact on our industry.
First up were last summer’s floods. The then new prime minister won media plaudits for his calm handling of the situation. But those of us associated with insurance soon felt rather differently about matters. As they sought to deflect criticisms of inadequate flood prevention measures, ministers took some pretty cheap swipes at the insurance industry.
It has taken a year, and much admirable endeavour by the industry, to rebuild the relationship. The Pitt Review cannot have made easy reading for ministers, and their side of the ‘deal’ is that they have agreed to take its recommendations seriously. We can only hope this new, positive spirit of partnership endures; and also that ministers deliver on their promises.
Second, the spectre of domestic terrorism loomed large again. We have enjoyed a merciful period of quiet on that front so far this year, but all of us in our industry know that, as well as hoping for the best, we must also prepare for the worst.
Recent successes on the part of the police and security services cannot blind us to the grim truth of the old saying that, whereas the rest of us have to be lucky every time, the terrorists need to be lucky only once. It is a risk we all share.
“As they sought to deflect criticisms of inadequate flood prevention measures, ministers took some pretty cheap swipes at the insurance industry.
Third, there was the run on the Northern Rock and subsequent question marks over the regulatory regime, confidence in financial services and the general economic situation. The old cast-iron rule seems to be reasserting itself: when the country experiences economic difficulties, the governing party inevitably gets blamed.
I have been in parliament since 1976 and I cannot remember a more turbulent time, as politicians and voters alike struggle to predict what the next day may bring. Our industry has a more important role than ever: our function is to bring some degree of security and certainty where none would otherwise exist. Never forget that without our endeavours UK plc simply could not function at all. This is even more the case during difficult times such as these. We cannot, must not, lose our nerve.
The lifetime of the current parliament must come to en end at midnight on Monday 10 May 2010 at the latest, making Thursday 3 June 2010 the last possible date for the next general election. Labour still has a comfortable working majority and my own view is that the likely date will be Thursday 6 May 2010, namely local election day.
So ignore the hype and prepare for the long haul. In the meantime, let us hope politicians and journalists alike take a leaf out of the book of the insurance industry and confine themselves to making only calm, considered and realistic predictions about the future.
Lord Hunt is a partner and chairman of the financial services division of national law firm Beachcroft.