The ABI has successfully lobbied the government, but as ABI director of general insurance Nick Starling tells Andrew Holt, there are plenty more issues to be dealt with
Having come into his job promising to knock down doors to get the ABI's message across, Nick Starling has a list of distinguished successes.
The ABI's director of general insurance has not been in his role a year, yet he has already converted the Deputy Prime Minister to the ABI's view of strengthening planning policy for flood risk areas and introduced a statutory responsibility to consult the Environment Agency in such cases.
At the same time, the Minister for Environment and Climate Change, Elliot Morley accepted the ABI's view that there is a need for an increased investment to reduce flood risks in local areas.
But Starling does not have a sore foot from all the kicking. "I haven't had to kick down any doors, because what I found fascinating is that people left them open to me. When I contacted them and said the ABI needs to talk, they said 'yes'. That has been gratifying."
But the credit must fall to Starling and his team for continually putting forward the message to the government and relevant agencies, and using simple but shrewd political tactics.
"I have engaged with Number 10, The Deputy Prime Minister, the Cabinet Office, The Department of Environment, Food and Rural Affairs (DEFRA), the Department of Transport, and the Department of Constitutional Affairs. The general approach we take is to say that we have common problems and common issues to deal with and we can deliver A, B and C and you have to deliver D, E and F," he says.
Another example of such a success was bringing the issue of uninsured driving within the law. "We went to the government and said we have a joint problem, which is uninsured driving. We said it costs our premium payers and it costs you in accidents. We said we can sharpen up our database but what you need to do is change the law which has now happened," he says.
But Starling says that in terms of media awareness and spreading its story, he is most satisfied with the issue of climate change.
"On climate change, there was a huge amount of international interest in our work. We are one of the few organisations which actually thought beyond the right hand side of the graph. We have shown what goes beyond that and what you can do about it."
But Starling has much work still to do. He is lukewarm on the Compensation Bill. He describes it "as a good first step", but he adds: "It doesn't address the fundamental issue around compensation, which is the claimant is not at the heart of the system."
He adds: "What you want is a system that when something goes wrong, in which personal injury occurs, you can sort out the simple cases, you can get people on rehabilitation, you can get the system working, speed it up, get the costs out. That is the big prize in the compensation system that needs to be achieved. The Bill covers claims management companies, which is a good first step. But the next step is to take the cost and time out of the system."
One of the problems Starling identifies with the current compensation system is there is every incentive to exaggerate a claim. "A lot more needs to be done on this," confesses Starling.
The ABI is to launch an initiative later this month to deal with how the system should change. But Starling says the ABI needs to decide which battles it should fight. "The ABI has done a lot of lobbying. But it has to be the right amount and quality and when you make your case you have to say what you will give as well. There are times when you need to shout from the rooftops and say this is not right. But you have to set out what the insurance industry can and cannot do."
He says his next big task is teaching the government about risk. "We want to step up what we do on risk and government awareness of risk. It is about understanding how to do risk management and not just assuming that insurance picks up the pieces. Good risk management is what we hammered out with Defra on flood plain development."
Starling's mission statement for the next 12 months is therefore comprehensive.
"The compensation system looms very large. We need to take the next step in motor insurance, we have dealt with uninsured driving, now we want to deal with issues surrounding young drivers and road safety.
"On climate change we need to give much more advice to government and deal with climate change rather than just listening to people ringing their hands and hope omissions come down."
On regulation, Starling says it is important to have a proper risk-based regulatory regime. "We will push the FSA on regulating with a light touch and what that means."
He says he looks forward to the FSA's review of regulation. And he finds the FSA's treating customers fairly initiative something of an anomaly. "General insurance is a highly competitive market and the best way to treat customers fairly is to have a competitive market. The best thing for customers is competition."
On this, Starling puts a great deal of emphasis on educating the FSA about the insurance industry. "We need to make sure the FSA understands the general insurance market better. They are learning. Because all you need is broad principles on the validity of what you are selling and then let the industry get on with it."
And on the criticism that the ABI is too cumbersome a body, having to deal with both general and life insurance Starling says: "The ABI is seen as the doyen of trade associations."
"It carries clout and is listened to," he adds. With Starling in charge there is no doubt this will continue. IT