The ABI (Association of British Insurers) has launched a three-stage plan to help restore confidence and trust in European financial services. A report outlining the ABI’s priorities for Europe, also highlights key principles for a global recovery. The launch came as the ABI Board met in Brussels, and had discussions with senior European officials and MEPs.
The UK insurance industry is the largest in Europe, and in total European insurers generate premium income of €1,110 billion, employ over one million people and invest more than €7,200 billion in the European economy.
The report, “The Insurance Industry: Rebuilding Confidence in Europe”, proposes three steps to help build trust in European capital markets:
-Short term:
Better use of the information exchange offered by Colleges of supervisors.
Medium term:
-More resources for Level Three committees, which bring together European regulators in specific financial sectors.
-Long term:
A debate over the feasibility of a single prudential supervisor, to overcome the current lack of trust between European regulators.
The report also includes principles to underpin any new legislation or proposed solutions to reform financial supervision. These include:
– The need for better, targeted regulation rather than simply adding to existing rules
– The importance of consumer needs, which should be fundamental to any proposed changes
– Risk and principles-based regulation (as opposed to “light-touch” regulation) is key
– The need for a global response and the dangers of protectionism
“What happens in Brussels is critical to the UK insurance industry, which is the largest in Europe,” says Archie Kane, chairman, ABI and group executive director of Insurance, Lloyds Banking Group. “It is now a crucial time to engage with European officials and regulators, and holding our Board meeting in Brussels alongside the launch of this report, shows the determination of the ABI to make sure the views of UK insurers are heard.”
“Decisive but considered action is needed from Brussels,” says Stephen Haddrill, director general, ABI. “Confidence and trust must be regained, and calls for protectionism challenged. We must now look carefully at both radical and evolutionary ways forward, including the possibility of a single European prudential supervisor.
“Consumers and businesses deserve all options to be explored to ensure we emerge from this crisis stronger. Any plan of recovery must recognise that cross-border financial organisations will lead the recovery of Europe’s economy. We hope that the work done by the de Larosire Group will set out a clear timetable and roadmap for reinforcing the supervision of Europe’s financial services.”
“Insurers are weathering the financial storm and have a key role in protecting EU citizens and businesses. As both operators and investors in Europe, the UK insurance industry is an important voice in this debate.”
L.D.