So today is the day when Britain’s second female Prime Minister takes office as Theresa May is formally invited by the Queen to form a new government. Rumours are already swirling about a more gender-balanced cabinet with promotions for the likes of Amber Rudd and Justine Greening widely expected as part of a reshuffle. However, what can the insurance industry expect?
Looking historically, the new PM has not been shy in getting involved in insurance-related matters.
In 2014, May, in her position as Home Secretary, was integral in the introduction of a ban on UK insurers paying out on claims linked to ransoms paid to terrorist organisations. It was already illegal to fund any organisation that the Government deemed to be involved in terrorism – however, this stipulation removed the grey area surrounding insurance firms paying out on claims where someone had paid a ransom in order to release a kidnapped person being held by a terrorist organisation.
Speaking at the time, Tom Keatinge, terrorism financing expert and associate of the Royal United Services Institute told the IBTimes
that he was “surprised there was any uncertainty”.
“However, I guess where the uncertainty could come from is that given London is a major insurance centre then you could have a situation where a ransom is paid from a country which is softer on the topic, but the insurance coverage is provided by the London market,” he said to the publication.
“Maybe the international nature of the insurance market means insurers can find themselves in a position where payments are made from jurisdictions which don’t take the same approach to ransom payments to designated organisations as the UK.”
Perhaps of more widespread note was another action from the incoming PM in 2014, when she published a document on her website on the back of serious flooding in her own Maidenhead constituency. She formally addressed the issue of insurance for flood victims, looking to address some shortfalls in the Flood Re program, with the following statement.
“The availability of affordable flood insurance has been an issue of concern for some time, and there are fears that the recent flooding will exacerbate difficulties in getting good quality insurance. The Government’s Flood Re provides homes at high-risk of flooding with affordable flood insurance. However, properties in Council Tax Band H are excluded from Flood Re, and several properties in the Maidenhead constituency are likely to be affected by this.”
Her involvement with Flood Re continued as recently as March this year when she met with the chairman of the scheme ahead of its introduction in April.
Speaking after the event she said: “It was useful to meet with Flood Re and hear about how the scheme is set to help local people in the Maidenhead constituency. Some households struggle to access affordable flood insurance and I hope that the situation will improve after Flood Re has launched in April.”
So having been at the centre of two key insurance rulings in her role as Home Secretary, what can we expect in the future from May? For insurers and brokers alike it would appear her first role is to address the ongoing Brexit concerns and to resolve the matter of whether the UK will exit or stay in the EU in order to bring clarity to the sector.
"We welcome the resolution of the leadership of the Government and sincerely hope Mrs May will move quickly to remove the uncertainty around Brexit, outlining plans for the UK and ensuring other important legislation, such as the proposed changes to the whiplash claims environment, continue unhindered,” said Gary Humphreys, group underwriting director at Markerstudy
Meanwhile, Rob Townend, Aviva
’s UK GI claims director, wants to see some action taken on last year’s Autumn Statement.
“A lot has happened since the injury reforms were announced in last November’s Autumn Statement,” he said. “It is clear that consumers are keen to benefit from the savings offered by the civil justice reforms, and which would also address related issues such as motor fraud and nuisance calls.
“Our message to Government is clear: let’s help motorists by implementing the Autumn Statement reforms to sustainably cut the cost of motor insurance. We have committed to passing on every penny of the savings from these reforms to our customers, and we are calling for the Government to begin the consultation process so consumers will benefit from these savings as soon as possible.”
What actions do you believe that Theresa May needs to take in her new role? What reforms would you like to see introduced relating to the insurance sector? Leave a comment below with your thoughts.
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