| Link(s): | abi-annual-report-2024.pdf |
Context
The ABI has published its Annual Report 2024, with the title “Building Resilience in a Changing World”. The document is split into 16 sections over 48 pages, the sections including bringing the industry together, engaging with Government, advocating for tax reforms, general insurance priorities, and shaping the horizon of the regulatory landscape.
Key points to note and next actions
- In relation to IPT, the report states that the BBI “worked hard in the lead up to the Spring Statement to campaign against Insurance Premium Tax”, including a campaign video calling for a cut to the tax. The call was supported by research that showed that very few people understand the tax, but it affects the vast majority (84%) of households – making it what the ABI calls a “hidden in plain sight” tax. The report states that there has been no rise in IPT in 2024, but similarly there has been no reduction either.
- Most of the section in relation to shaping the regulatory horizon was backward-looking, setting out the engagement the ABI has had with the Regulators and the topics on which it has collaborated with them, including Consumer Duty. The ABI intends to continue that collaboration but there is no real indication of what is next on their horizon in shaping the FCA.
In relation to general insurance:
- The ABI has been at the front of the industry’s work to explain the factors behind the increase in the cost of motor insurance. The ABI’s 10-Point Roadmap identified a combination of actions that industry, government and regulators could take to help tackle the cost of providing motor insurance.
- Together with Allianz CEO, Colm Holmes, the ABI gave evidence to the Treasury Select Committee on the rising cost of motor insurance and regulatory reforms, including the FCA’s Consumer Duty. The development of the roadmap and engagement with the then Shadow Treasury team shaped the final proposals in Labour’s manifesto, recognising the impact of claims costs on increasing premiums and the work that the industry had already been doing to support customers.
- The ABI joined a stakeholder panel to support the Government Taskforce looking to improve the affordability of motor insurance, whilst its latest premium tracker shows the cost of the average premium has fallen recently.
- The ABI launched its Premium Finance Principles in April to improve outcomes for customers paying monthly for their motor insurance. The principles underline what fair practice should look like and revolve around five elements: transparency, affordability, fair value, proportionality, and accountability. They represent what is possible within the limits allowed by competition laws and provide a basis for firms to take meaningful action.
- In relation to tackling fraud and financial crime, the ABI has worked with the Home Office and Joint Fraud Taskforce, supporting the development of the Insurance Sector Fraud Charter. The Charter includes a series of industry and public sector commitments to make the UK more resilient to insurance fraud, including raising consumer awareness, supporting victims and data sharing.