At his opening address to the BIBA Conference 2017 in Manchester, Steve White, BIBA CEO warned the industry to be wary of current turmoil affecting the sector.
Making an analogy to a weather mis-forecast which famously denied the existence of a hurricane approaching the UK in 1987, he said that in political and economic terms, there are storm clouds on the horizon that BIBA is tracking.
However he promised delegates that the association would remain vigilant and avoid unreliable forecasts like those of Michael Fish the night before storms battered the United Kingdom nearly 30 years ago.
He listed the conditions causing most concern domestically included:
- The doubling of Insurance Premium Tax (IPT) in only 18months and the threat of more increases to come.
- The changes to ‘Ogden’ discount rate for calculating catastrophic injury damages.
- Increasing inflation and decreasing value of Sterling.
- The coming snap election and all that will bring.
“Over the horizon, of course is the force of the coming Brexit and the need to find suitable solutions to enable the insurance sector to continue to trade in Europe,” he said. “Further afield are the noises of protectionism from the new United States Government that could reduce the optimism of a US-UK trade deal. These added to our domestic turmoil point to the development of a perfect storm of disruption.
White added: “Cost pressures within our industry, economic factors affecting insurance buyers, uncertainty and new competitive threats to the UK insurance market are all possible issues that we have to deal with. If a few of these storms materialise and hit us at the same time, they could create significant challenges for us.”
BIBA said it is “actively tracking these matters” and continues to campaign for outcomes that are positive for members and their customers.
Discussing the predicted challenges after speaking on stage White added: “Despite this, our industry remains in a healthy state and continues to make a significant contribution to the UK’s service trading surplus. There are opportunities arising from insurtech, from autonomous vehicles and from the desire to really increase trust in our sector and we will be right behind our members as these opportunities develop.”