07 July 2013

The Significant Seven - ABI publishes report on challenges facing the insurance industry

ABI published 'Identifying the Challenges of a Changing World', an analysis of the challenges facing the UK insurance industry and society, and launched a debate on how insurers can play a key role in finding solutions to the issues that will shape our world in the 2020s and beyond.

Consumer research also published by the ABI today underlines public concern on some of the key challenges in the report.

The report identifies seven over-arching trends most relevant to insurers:

• The digital revolution and impact of the social media
• Global convergence, with an increasingly inter-connected and balanced global economy
• The development and recovery of Western economies after the financial crisis
• Global ageing
• Political challenges, with a more proactive and visible industry approach to public policy than previously
• Interventionist regulation
• The continued impact of climate change

The report examines the extent to which the insurance industry can play a greater role in meeting the challenges of a changing world.

Otto Thoresen, ABI Director General, said: "This report is ABI ‘thinking out loud’ about what impact national and global trends have on our customers, the economy and the industry. Our report marks the start of a debate in the industry and with other stakeholders about what action is needed to cope with, and take advantage of, the huge changes we all face.” 

The ABI is using the report as a springboard to launch its ‘Big Debate’ within the industry and among other stakeholders on how to deliver better solutions for customers.  Debate will likely focus on regulation, stimulating economic growth and infrastructure investment, welfare reform, paying for life after work, and the acceptable use and security of personal data now available.

The need to tackle these issues is highlighted by ABI-commissioned research published today on people’s views on these challenges:

• On welfare, the majority of people think the Government should have primary responsibility for paying living costs if someone loses their job (52%), becomes ill and is unable to work for longer than a month (65%) or suffers serious injury and is unable to work again (80%)
• Many families remain financially unprepared for the future. Over half (51%) feel that they or their family would struggle if they were seriously injured, diagnosed with serious illness or if the main breadwinner dies. Yet more than half (57%) do not have life, critical illness or income protection insurance. Two-thirds (66%) of people admit they would struggle to pay for long-term care costs, while 50% were unaware of any current state help for possible long term care costs in old age
• Retirement is seen as non-existent for some. One in five (20%) non-retired people think they will never retire; of those who do think they will retire, just over four in ten (41%) felt that they will continue to work at least part time
• On data protection, nearly three-quarters of people surveyed online (72%(2)) say that adequate protection of personal data is important or extremely important. Six in ten people (60%) currently participating in social media would be unhappy about their personal information which they provide through social media being used by companies to personalise services to them.

Press release

Full report

© ABI