Joe Plumeri, Chairman and CEO of Willis Group Holdings, “told an audience of insurance executives that the new UK Government must address the struggling economy to spur growth in the British insurance industry, while calling on the EU to resolve pending regulatory issues to bring greater certainty to the industry,” said a bulletin from Willis.
Plumeri’s made his comments in an address to over 800 delegates attending the British Insurance Brokers’ Association (BIBA) 2010 Conference and Exhibition at the ExCel Centre in London.
He urged the UK’s new Government to act decisively to spur recovery and that the negative impact of the downturn on insurance is reflected in the quarterly results of both large and small brokerages. “Right now, our industry in the U.K. is hit by the double whammy of a persistent soft market and lagging economic activity. We’ve seen a dramatic slowing of the consolidation among smaller firms and downward pressure on the value of broking businesses,” Plumeri stated.
Generally Plumeri approves of the consumer protection goals of Solvency II, but he raised the ongoing question of the impact of the proposed EU regulatory scheme on insurance captives.
He echoed the concerns many people in the industry, notably the Federation of European Risk management Associations (FERMA), who have expressed their concerns that the regulatory requirements for EU insurance firms may not take into account “the fact that captives are fundamentally different from mainstream insurance companies and may not require Solvency II’s intended level of regulation.” [See also IJ web site – https://www.insurancejournal.com/news/international/2010/03/15/108129.htm].
“The concern is that, rather than improving the system, Solvency II could make risk management more difficult for some companies,” he continued.
Plumeri also pointed to the uncertainty surrounding the new Insurance Mediation Directive from Brussels, with changes impacting European brokers that could range from full transparency in compensation to the abolishment of commissions altogether in favor of client-paid fees, as is currently the practice in Scandinavia. “What our industry would most welcome is clarity and certainty.”
The full text of Mr. Plumeri’s speech, which also examines the increase in catastrophic “Black Swan” events, the decline of corporate trust and the top ten risks facing business today, along with the insurance implications of those risks, may be accessed at: . http://www.willis.com/Documents/Media_Room/Press_Releases/2010/Plumeri_Speech_BIBA_0510_FINAL.pdf
Source: Willis Group Holdings
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