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Keynote speech by Andrew Griffith MP, Financial Secretary to the Treasury, on the ABI Annual Convention
Thanks, Louise… good afternoon everybody.
I used to be with you for the inaugural ABI Local weather Summit because the UK’s Internet Zero Enterprise Champion and it’s a pleasure to be again talking to you once more right this moment as Metropolis Minister.
The UK is a world chief within the insurance coverage sector with a pioneering historical past.
We’ve come a good distance because the because the Nice Fireplace of 1666 and establishing the primary hearth insurance coverage market.
At the moment we’ve the fourth largest insurance coverage sector on the planet, the biggest in Europe, managing round £1.7 trillion price of investments and using a whole bunch of 1000’s of individuals, proper throughout the nation.
So let me place on document the thanks of all of us in authorities for every thing that the insurance coverage sector does.
Such as you, I would like us to be an progressive, business-friendly and agile economic system.
Such as you, I would like us to ship broader financial development, that’s inclusive of everybody wherever within the UK they stay and work.
And such as you, I wish to harness {our capability} to work collectively to deal with the good nationwide and worldwide problems with our age, from an ageing society and the genomics revolution to saving nature and adapting to a altering local weather.
As Hannah mentioned in her speech at your annual dinner final night time, the insurance coverage trade will not be a fair-weather pal.
You deal with these struck by catastrophe.
You deal with those that lose their jobs.
You deal with those that have fallen sick.
And also you assist individuals deal with themselves once they retire.
Enterprise isn’t as some say, a part of the issue – however you’re completely a part of the answer.
Earlier than I discuss a little bit extra about our plans for the sector, let me discuss in regards to the wider economic system.
I do know we nonetheless face challenges.
And true to my former finance director self, a level of warning as we plan for the yr forward is smart.
However we should always preserve our efficiency in a world context.
Sure, we’ve some headwinds – significantly in the price of vitality – however so too does many of the western world.
Sure, we’ve not but returned to pre-pandemic employment or output ranges. However regardless of a worldwide pandemic we’ve practically the bottom unemployment for half a century.
Sure, inflation has risen, which is why the Prime Minister’s first precedence is to halve inflation this yr, however it’s nonetheless decrease than 14 EU nations.
And whereas our public sector recovers extra slowly than we wish from the pandemic – strengthening the necessity for reform – the non-public sector has grown 7.5% within the final yr.
No room to be complacent – however neither ought to we fall into the lure of believing people who say decline is inevitable.
It was unsuitable once they mentioned it within the late seventies, and it’s unsuitable now.
In simply 80 days’ time we are going to have fun the Coronation of His Majesty the King.
It’s an excellent reminder of the distinctive strengths of our nation.
The energy of our democratic establishments and the lengthy historical past of the peaceable switch of energy.
Our ties to the Commonwealth which alone covers a 3rd of humanity.
The rule of legislation, the English language, and certainly nice world capabilities such because the corporations represented on this room.
It’s why you could be assured that our greatest days lie forward.
And be in little question that this authorities has a transparent imaginative and prescient for the UK as an enterprise tradition constructed on low taxes, reward for taking dangers, entry to capital and smarter regulation.
Sound cash should come first however our ambition is to don’t have anything lower than essentially the most aggressive tax regime of any main nation.
For monetary companies, taking again management of our rule e-book from Brussels has given the UK a singular alternative and a second in time to do issues in a different way: To be the world’s most progressive, open and aggressive world monetary centre.
Our Edinburgh reforms take that ambition ahead. It’s a complete package deal touching a lot of you right here.
Reforming financial institution ring fencing, holding the regulators to account for enhancing the velocity of authorisations, reforming MiFID streamlining the senior supervisor regime and eradicating the pensions cost cap. Simply a few of round 30 measures to make us extra aggressive.
The widespread theme right here is that this authorities has a philosophy of regulation which is easy and proportionate.
Having been in enterprise and having labored in monetary companies I do know you’ll be able to’t have laws or regulators who merely attempt to take away all threat.
Solvency II is an ideal instance of our method.
We labored carefully with ABI members all through, listening to the voice of practitioners.
There have been loads of naysayers and it could have been simple to not make any change.
However we’re 100% dedicated to delivering the reform package deal we’ve introduced to allow you to use your funding firepower to ship as an engine for nationwide dynamism while sustaining coverage holder safety.
Decreasing the chance margin will unlock at present unproductive capital, opening up the potential of decrease product costs and better annuity yields.
Broadening matching adjustment eligibility will make it simpler to speculate for the long run in tasks even when there’s a development part – whether or not constructing housing, wind farms or city centre regeneration.
Good for returns and good for society.
To be candid, this is a matter that goes far past this sector.
The mixture of overly prudent regulation and mark to market accounting requirements imply far an excessive amount of UK capital is trapped in brief time period, low yielding investments.
The ensuing ‘efficiency penalty’ will not be serving the wants of British buyers and pensioners.
It’s one thing that the Chancellor and I are focussed on as we glance to assist Britain be a start-up and scale-up superpower.
Within the case of Solvency II, it was useful that, once more working with you, we have been in a position to talk clearly what advantages will stream.
100 billion of further funding in productive capital over the following ten years.
I welcome ABI members’ provide to assist the Authorities in monitoring this funding. Now we have a shared curiosity in demonstrating the sector’s dedication to society and having the ability to speak about it publicly.
As a sector you’ve got a proud custom of innovation.
All of us face transformational technological modifications over the approaching many years from traits comparable to superior analytics, cloud computing and synthetic intelligence.
To take care of our worldwide competitiveness, the UK should embrace the potential of those shifts and focus our consideration on development and innovation within the sector.
These developments current alternatives throughout the trade, as threat modelling turns into more and more superior.
And with the broader sector, UK insurtechs are additionally rising to this problem.
The UK has the biggest insurtech sector in Europe. Actually, lately the UK has acquired as a lot funding into its insurtech sector as the remainder of Europe mixed.
In 2021 alone, it raised over £770 million in funding.
Companies are harnessing technological innovation, comparable to sensors to assist individuals in flood-risk areas entry insurance coverage, sensible contracts to ship higher outcomes for companies and shoppers, and perfecting synthetic intelligence to enhance claims processes after an accident.
I stay up for working with you all to proceed to assist development and innovation throughout the sector, serving to make sure the UK insurance coverage sector stays world main.
Lastly, I wish to speak about your contribution to society.
Final time I used to be right here I used to be banging the drum for companies transitioning to web zero. And I do know that you’re taking a number one position in tackling local weather change.
It’s however one instance of how you’re pivotal to a number of the largest challenges in society.
Take ageing.
Practically 9 hundred thousand enquiries have been made by older residents because the Authorities dedicated to the Age Settlement with the ABI together with the British Insurance coverage Brokers’ Affiliation to offer them with improved entry to motor and journey insurance coverage.
Making certain we’ve the proper social care system is among the grand challenges of our time.
Unhappy to say, a majority of us will develop a care want in our lifetime and, in accordance with the ONS, in 50 years’ time the variety of individuals older than 65 is more likely to develop by greater than 8 million.
That’s roughly the dimensions of London’s inhabitants.
Whereas the Authorities has taken the tough determination to delay charging reform to assist native authorities meet present pressures; we stay dedicated to this agenda. And insurers and long-term financial savings suppliers are elementary to delivering a step change in the way in which individuals plan and pay for care.
We’re additionally working collectively on the Flood Insurance coverage Listing and the Monetary Inclusion Coverage Discussion board, so that everybody can entry the insurance coverage insurance policies they want.
Let me conclude by once more commending the work of the ABI, your members and the entire insurance coverage in supporting coverage holders, the economic system and wider society.
It is a world-leading sector, however we should not be complacent.
So allow us to preserve going. As we proceed to stride towards making the UK the perfect place to do enterprise on the planet, I ask you to maintain investing, preserve using, preserve coaching, and continue to grow.
And let me say one last factor.
“Thanks.”
Thanks for creating the wealth, for taking the dangers, for choosing up slack throughout and after the pandemic.
We always remember you’ve got a selection – not simply the place to find or to commit your capital however the way you spend that almost all treasured factor – your time and your private management.
This authorities – in addition to me personally as your minister – will all the time be in your aspect.
Thanks.
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