FSA initiative SHOULD strike fear into the insurance industry


I have questioned before, the unwillingness of the insurance industry to read the writing on the wall. I’ve suggested that it may be a heady cocktail of arrogance and ignorance but I would like to add a dash of complacency to the mix!

Last week The Independent told us what to expect from a speech by Martin Wheatley, MD of FSA and Chief-in-waiting of FCA  which assumes control for Financial regulation from next year. His speech should have the alarm-bells ringing (video)

It prompted me to ask this question (in Linkedin): 

WHAT DOES THE FUTURE LOOK LIKE IF YOUR ENTIRE MODEL RELIES UPON SELLING "INFERIOR" SOLUTIONS FOR UNJUSTIFIABLE COMMISSIONS AT UNSUSTAINABLE PREMIUMS?

I don’t have an answer, any answer, but, from the people I have spoken to personally, the message seems to be “if change actually happens, it’ll take 5 years so”. So, no need to panic!!!

I don’t share this belief. In fact I was taken aback by such reactions.

But I am even more alarmed by the fact that, irrespective of the eventual timescale, the industry is out of touch with both Public and Regulatory sentiment in relation to commissions and so much more in relation to both the values and value provided by the insurance industry. SURELY WE CAN RECOGNISE OUR OWN FAILINGS AND THE NEED TO GET OUR OWN HOUSE IN ORDER WITHOUT WAITING TO BE TOLD HOW TO DO THINGS?

The very suggestion, coming hard on the heels of talk of “hard disclosure” of commissions, courtesy of EU Regulators,  should be all the notice that is required to prompt action!?

This isn’t a “bolt from the blue”, It’s no Black Swan event. It was entirely foreseeable as long as you were observing the signs…not burying your head in the sand.

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