Economic secretary to the Treasury believes ‘brokers will play a crucial role in rebuilding consumer trust and developing clearly worded policies going forward’

The insurance industry and UK government need “to look calmly” at the lessons learned from the FCA’s business interruption (BI) insurance test case to ensure “that customers have confidence that their policies will deliver when they need it most”, according to Conservative member of parliament and economic secretary to the Treasury John Glen.

Speaking at the launch event of trade body Biba’s 2022 manifesto in London this week (25 January 2022), Glen emphasised that there are “valuable reflections” that both the insurance industry and the UK government can glean from the test case action, which was heard by the High Court and Supreme Court in 2020.

The test case aimed to clarify the interpretation of non-damage BI policy wordings when applied to claims linked to the Covid-19 pandemic and associated government mitigation measures.

“I do think there are valuable reflections we can make from the FCA business interruption court case and I do think we need to look calmly at what those lessons are and how we can learn – government as well as industry – how those things can be done better in future,” he said.

‘Significant’ reputational damage

In line with this perspective, Glen believes that brokers have “a crucial role” moving forward – especially in terms of rebuilding the insurance sector’s reputation, which was detrimentally affected by the test case action.

Addressing brokers attending the event, he explained: “There is significant reputational damage and consumer distrust in the insurance sector and the case underscored the importance of transparency in policies and a clear understanding of the terms of cover.

“But given Biba’s ability to forge strong customer relationships and expert understanding of your clients’ needs, brokers will play a crucial role in rebuilding consumer trust and developing clearly worded policies going forward.

“Insurance serves a critical purpose for business and it is vital that customers have confidence that their policies will deliver when they need it most.”

Glen praised the hard graft of the insurance industry during the pandemic, noting that it had “worked hard to deliver over £1bn in claims to its customers”.