Who is John Tiner?

John Tiner has a lot on his mind. He has just released his consultation paper on Financial Services Authority (FSA) guidance for the insurance industry. He has a Treasury Select Committee to attend. But more importantly Leeds United, his favourite football team, has a new manager.

"We must keep Rio Ferdinand. I'm very optimistic this season with Terry Venables as manager. He'll do the job."

Virtually one year on in the job, Tiner has a heavy agenda. A progress report on The Tiner Project is expected to be published by October outlining his vision on insurance reform, particularly on the underwriting structure.

Around the same time, and totally separate to his work, the Treasury should finally publish its own consultation paper on general insurance, which means he will then issue yet another document clarifying the FSA's position based on the Treasury's conclusions.

"I get confused myself," he admits.

A fact finding mission to Australia a few months ago also brought some food for thought. The trip was to meet his regulatory "equivalent" and to find out how the country's depolarisation of the investment market had worked. Australia has just started regulating the insurance broker market, so there were a number of similarities with the UK situation.

"Australia also has some very serious problems in insurance. And it is not just the Royal Commission which has resulted in the government paying out a lot of compensation to policyholders. There is a crisis in public liability.

"I was told surf clubs couldn't get cover and I was there on Anzac Day when there was an uproar because the commemorative marches by old soldiers couldn't take place."

Suddenly insurance became a major political football, with the Australian Pime Minister John Howard making statements to allay fears, he says.

The Association of British Insurers (ABI) recently stated that the employers' liability (EL) market was "unsustainable" and could adversely impact on the economy. But Tiner does not believe the UK situation is as extreme as Australia.

"We don't have anything like the problems it has. My view is that we have a different legal system and don't have the same tort problems as Australia. We have more companies and so more competition.

"While there are areas which are showing exposure, such as flooding and EL in the construction sector, they don't have the systemic proportions that are deep enough to make the social impact that I observed in Australia."

He feels that the ABI and other associations should keep lobbying the government and the FSA, but "we need to manage and get through it so it has a positive outcome for consumers".

"We are not facing the abyss here - not even close," he added.

New characteristics
Turning to the hardening of the UK market, he says the underwriting cycle was "moving up anyway" before 11 September and has shifted up sharply since. Higher rates and higher retention are making it a harsher environment for corporations and consumers.

"But that is what happens during the underwriting cycle. But the new characteristics here are that the retentions are higher than the past and that the risk to the insured is higher. And the number of exclusions drifting into policies is getting higher. So the consumer has the potential of being hit twice here."

His own household policy has an extra two pages of exclusions this year, he noted. "Insurance is all about risk transfer and today less risk is being transferred. Eventually all this will be passed to the consumer."

But does commercial lines insurance have to be regulated as rigorously as personal lines, when it is designed to protect the insured?

"It is easy to say companies can look after themselves. But a lot of that business is employers' liability which means you are affecting real people. Public liability is another. So there are aspects of commercial lines business that is affecting the consumer.

"And while consumers enjoy additional protection from the compensation scheme and the ombudsman, which companies don't, I think employees deserve it," he says.

A recent Financial Times report quoted Tiner as saying some insurers and life assurers would "wither on the vine", but he claims the comment was made months ago at a dinner before much of the worries on the major insurers' solvency was first raised.

"In general the solvency margins in the market are good. I'm not unduly worried about that at the moment," he says.

What does annoy him was that rating agency Fitch, he claims, was completely wrong on the FSA's plans for risk-based assessment.

"There are not 200 high risk firms, but 200 high impact firms and some are not large. We are working through the industry and basically asking more searching questions. They misunderstood completely that these risk-assessed firms were at risk. They got the wrong end of the stick," he says.

Before moving to the FSA, he had spent over 20 years at the ill-fated accountancy firm Andersen and still has friends there.

"Of course I'm sad at what has happened there, but I'm pleased that they have secured a deal with Deloitte & Touche and country by country are trying to get things sorted. In those days my reponsibilities were to my clients and fellow partners. Today my reposnibility is to the country's consumers, so it is a much greater challenge."

What free time Tiner does have is spent with his family, either playing tennis or sailing in one of his three boats. "They are only small dinghies - not yachts."

So is your wife impressed with the importance of your work? "My wife is never impressed with anything I do," he says with a laugh.

He stands to leave. He is off to the Treasury. He turns to make a passing comment: "El Tel will be good. Rio must stay."