Association defends its representation of the GI industry following broadside

Robert Hiscox has hit out at the ABI, dubbing it “feeble” and accusing it of focusing too heavily on corporate governance and life insurance.

“It is a shame the ABI is so utterly feeble – it’s obsessed with corporate governance, then life insurance,” The Independent quoted Hiscox as saying at a London conference last week.

Hiscox is due to step down as chairman of Lloyd’s insurer Hiscox, which his father founded, at the end of this year.

The ABI has hit back at Hiscox’s comments, insisting it works hard on behalf of general insurers.

“We represent all insurers, general insurers included,” ABI spokesman Malcolm Tarling told Insurance Times. “We do a lot of work to represent general insurers to reflect their interests and concerns.”

Tarling pointed out that a number of issues in the ABI’s business plan have a general insurance focus. The plan includes all aspects of motor insurance, fraud, the future for flood insurance, asbestos and Solvency II, he said.

He added that Hiscox as a company has a representation on the ABI board. “That business plan is reviewed by the board regularly,” he said.

Hiscox made the comments in the questions-and-answers section of a speech in which he also attacked the Bank of England and the FSA. He was particularly critical of the FSA’s approach to implementing Solvency II.

“Solvency II, which emanated from Brussels, is basically a good idea of putting every possible risk through one computer model but it has been blown out of all proportion by the bureaucrats of Brussels and further amplified by the UK regulator,” he said.

He also questioned the Bank of England’s ability to regulate the insurance industry.  

“If the thriving and very important insurance industry is to be regulated by the Bank of England, it would help if they had someone in a senior position with some knowledge of our industry,” he said.

He added: “If I leave you with one action point, it is to insist that someone with insurance experience is made at least a deputy governor of the Bank of England with responsibility for insurance.”

While insisting he is a firm believer in regulation, asserting that “free markets do not work” Hiscox hit out at over-regulation of the industry in response to a financial crisis insurers did not cause.

“It amazes me that after a period of stability when the insurance industry has been properly capitalised and has not abused that capital by punting in derivatives or on flies going up a wall, unlike the banks, that we should be subjected to the harshest regulatory environment in memory, and told we should be very frightened of the regulator,” he said. “It reminds me of that old saying that England’s greatest peril is ever from Englishmen.”