Good morning everyone and welcome to BIBA 2014 Customer, Customer, Customer.

Transcription

1 2014 BIBA Conference CEO address Good morning everyone and welcome to BIBA 2014 Customer, Customer, Customer. Today is May 14 th and in the research I did to prepare for this speech, I looked back to see what was number one in the charts on this corresponding date in years gone by. For the Manchester City fans in the audience, the Marcels with Blue Moon was number one on this day in For the regular BIBA Conference attendees, Johnny Logan s What s Another Year was top in The BIBA girls favourite was I want it That Way by The Backstreet Boys in 1999 And for those wishing I would get on with it, the Tremeloes Silence is Golden from this day in 1967 seems appropriate. We give considerable thought each year to our conference theme but I have to say that our choice this year has struck a chord with everyone I speak to. Whilst inevitably this speech and I m sure plenty of what you will both hear and talk about over the next couple of days will be industry-related, let none of us lose sight of the fact that we are all here to serve our customers after all, they must be at the heart of all our businesses.. This year marks the start of a three year residency for Europe s largest Insurance Broking event, the BIBA Conference here in Manchester Central. The facilities and conference infrastructure makes Manchester a favourite conference location for our sponsors, exhibitors and delegates. So to all of you, please make the most of your time here. I am sure there is plenty within the exhibition hall and on this year s conference programme to capture and maintain your interest, in addition to the wide range of out of conference entertainment right here in the Deansgate area. Let me take this opportunity to thank Lord Hunt for his kind words of introduction. David we are delighted that you have taken the chair of BIBA at this important stage in the association s development. I am happy to put on record the thanks of the BIBA team for the knowledge, insight and enthusiasm you have brought to the role.

2 Members can rest assured that the chairmanship is in very safe hands. David is already helping considerably in raising our profile and that of our members in political circles. A big thank you at this time to our principal conference sponsors Ageas, Aviva, Axa and Zurich. Your support for this conference is gratefully received and ensures it remains the premier insurance event in Europe. The BIBA Conference continues to attract an increasingly large audience and for this we are also grateful. This audience comes from far and wide and so I am particularly pleased to welcome the growing participation of overseas delegates. These include several of our friends from the BIPAR federation, including chairman Alessandro de Besi, delegates from Wisconsin USA, Israel, Gibralta, Guernsey, Jersey and the Nigerian Council of Registered Insurance Brokers and their president Ayo Shoderu. Welcome to you all. [PAUSE} I stood before you a year ago and set out my plans as the new CEO and so I thought I would take this opportunity to provide you with a brief progress report. You may recall that the BIBA Board set me the task of implementing our Strategic Review. Following an extensive consultation exercise, BIBA members voted overwhelmingly for changes to our governance structure which better reflect the way in which insurance intermediaries are now segmented. Five Advisory Boards have been established to represent smaller brokers, larger brokers, the International & Wholesale brokers, Networks MGAs and others and finally our regional chairs. These new Advisory Boards have now chosen their chairs and these chairs will from now on sit on the main BIBA Board. I can today confirm to you the composition of the Board. At our Board meeting last week, our current Deputy Chair Brendan McManus stood down and, as a consequence has left the Board.

3 On behalf of the BIBA Board and Executive team I would like to thank both Brendan and our past chairman Andy Homer for the outstanding contributions they both made to BIBA. Brendan will be replaced as Deputy Chair by Stuart Reid of Bluefin. The Smaller Brokers, which represent the majority of BIBA members will be represented by Kevin Hancock of Yutree Insurance and Andrew Gibbons of Mason Owen. The larger brokers had chosen Stuart Reid as their chair, with Peter Blanc, of Gallaghers as deputy. With Stuart now taking the BIBA Deputy Chair, Peter will represent the Larger Brokers on the main board. Tim Ryan, chair of Una, will represent the MGAs, Networks and others, Julie Page of Marsh has been chosen by the International & Wholesale Brokers Advisory Board as its chair and finally the BIBA regional chairs will be represented by Grant Scott of Cowans, chair of our East Midlands region. These new board members will be joined on the main BIBA Board by chairman Lord David Hunt, myself and BIBA Executive Director Graeme Trudgill. Full details of the Advisory Boards and their composition can be found on the BIBA website. Last year I called on members to join in and I am delighted with the enthusiasm members have shown for getting involved with our new Advisory boards. The recommendations of our Commercial activities and Executive Resources work streams have now been successfully delivered. We now have a focused commercial function, managed by Chris Knott, with two full time Area Managers Nicola Maguire and Sue Dimmock. Since I addressed you last year we have also added resource in our compliance, technical, membership and public affairs functions. The BIBA team is now stronger and better able to support you than ever before. [PAUSE]

4 Returning to my address last year at London s Excel, I committed the Association to be better at both listening to the issues that matter to members and then standing up and speaking out on such issues. Research we conducted with members in 2012 shows that our representational activities lobbying and promoting the use of insurance brokers, are the most valued by members. So, how are we performing against that commitment? The BIBA Executive team undertook a well-publicised tour of the regions last autumn to update members on BIBAs activities and to gather issues for the 2014 manifesto, which I will come on to shortly. This gave us the chance to outline some of the ways in which BIBA interacts with Government. And one of the most frequent comments we heard from members at these events was I didn t realise BIBA did all that so let me quickly outline for you how we promote members interests politically. Through the All Party Parliamentary Group on Insurance and Financial Services we have presented on and had great support for the Financial Services Compensation Scheme, Regulation, Riots, Flooding and the launch of our manifesto. We meet regularly with officials from HM Treasury to discuss a plethora of broking issues and most recently on the Insurance Growth Action Plan and the Insurance Mediation Directive revision and we are delighted to see them here today.. We have met with the Cabinet Office to discuss cyber insurance, business resilience and continuity for SMEs, with UK Export Finance on a range of trade credit issues, with the Environment Agency and DEFRA on the future of flood insurance for our members customers; with the Law Commission on changes to insurance contract law for both consumers and businesses; With the Home Office on riot cover and the Riot Damages Act; and the Government Equalities Office on helping signpost to brokers. This led to the creation of our signposting solution which to date has received over 100,000 enquiries from elderly holidaymakers and motorists seeking suitable insurance.

5 Issues involving the cost of motor insurance have seen us work with the Department For Transport on young drivers and with DVLA on the My-Licence initiative; with the Office of Fair Trading and the Competition Commission on the cost of motor insurance, claims, comparison sites and protected no claims bonus with the Ministry of Justice on whiplash and claims management companies and with number 10 itself on all key Manifesto issues. Finally, you may recall the partnership agreement I signed on BIBA s behalf on stage last year with the then DWP minister Mark Hoban. Since then we have been working with DWP and the National Apprenticeship Service on a range of initiatives including apprenticeships, careers in broking plus issues around the Employers Liability Tracing Office. I think you will all agree that is a pretty comprehensive suite of Governmental interactions. One that we as a BIBA Executive and you as members can be rightly proud of. [PAUSE] So turning to our 2014 Manifesto, let me start by thanking the many members that took the time to provide us with their invaluable contributions. The BIBA Manifesto is our calling card to Government, politicians, civil servants and regulators and sets out not just members concerns but how those concerns can be turned into wins for consumers, for business and for the insurance industry. Jonathan Evans MP, chair of the All Party Parliamentary Group on Insurance and Financial Services, describes our manifesto as the best example of transparent lobbying. At our Parliamentary reception back in January on the launch of the 2014 manifesto, Jonathan said and I quote: If you want to know how lobbying should take place, in an entirely proper way, based entirely on integrity, then you need really look no further than the model that is set by BIBA. So we have a manifesto Ladies and Gentlemen that is based on members issues and which will be used in a manner that is respected by the decision makers it is aimed at. There are plenty of copies on the BIBA stand in addition to the one on your chair if you would like one.

6 I will not use this address to go through the 16 campaigning issues we set out in the manifesto. However, I would like to pick out three issues for you this morning. Let s start with consumers. I briefly mentioned just now the success our signposting solution has achieved. The primary aim of insurance brokers is to find suitable insurance protection for their customers. But, for a variety of reasons there are many customers who struggle to find appropriate insurance and are left feeling that the market is broken. Now we as insurance brokers know that is not the case what is required, and what we successfully lobbied for with the Government Equalities Office, is a system where these customers can be signposted to a solution. One such solution is BIBA s Find-A-Broker service which now handles over 400,000 enquiries a year, all of which are passed on to BIBA member firms. We are calling on consumer bodies, Government and the industry to help consumers access suitable insurance more readily. I m today calling on the industry to work together on this important reputational issue let s not simply turn away consumers if we cannot insure them lets point them in the direction of someone who can help total signposting. Why wouldn t you do this? We can help facilitate it. Secondly in respect of SME businesses. The vast majority of SME businesses insure via the broker channel and indeed around 85% of BIBA members would consider themselves to be SMEs. In that SME space the BIBA-led claims working group is tackling issues such as reservation of rights and the basis of contract clause. We have worked with our friends at Axa to identify reasons behind claims repudiations and we will be engaging with the FCA s forthcoming review of commercial claims. We are writing a guide for SMEs on helping identify and prevent underinsurance. We are working with a variety of stakeholders to try and ensure that when the ABI Statement of Principles on flood insurance ends, there is access to flood cover for SMEs.

7 My team is today launching a new guide as part of the Dummies Guide series for small business insurance as a useful tool to help members. Copies are available on the BIBA stand. Lastly, we are working with the Law Commission on their proposals for reform of business insurance contract law. My third point is in respect of the insurance industry itself. Our support for the Insurance Industry Growth Action Plan enabled us to play a leading role in the launch of the insurance apprenticeship at the start of national apprenticeship week in March, including for the trailblazers initiative. Our manifesto calls for a removal of unfair barriers to business and the creation of more free trade agreements. Finally, and without wishing to sound too much like a broken record, our members still tell us that the cost and style of regulation is disproportionate to the limited risks we pose to the regulator. The direct regulatory cost comparison as revealed by London Economics in the manifesto, emphasises the point loud and clear that we have the most expensive regime amongst the major world insurance markets. We continue to call for more appropriate, proportionate and cost effective regulation. [PAUSE] Let me now return to our strategic review. Having completed the segmentation and governance strands of the strategic review, our attention has switched to the work stream looking at raising standards. One of the key findings that came out of our strategic review report was, and I quote: Against a backdrop where the expectation is that standards in GI intermediation will be required to be raised, there is a groundswell of support for BIBA to explore its future role in this regard. Any debate on raising standards is a healthy debate and we have been encouraged by the discussions there have been this year around the market on how best insurance brokers can work towards this. What I believe is required is what BIBA is calling a Pathway to Raised Standards. Allow me to elaborate.

8 When creating a pathway, its always prudent to have in mind the start and end points. Our start point is, quite naturally, the world we find ourselves in today. For the purposes of our Pathway to Raised Standards, let us consider how the world of insurance broking might look in 10 years time and to do this, let s use a real example. Axa s Amanda Blanc tells me that her 11 year old daughter Caitlin has always wanted to be an insurance broker, so we will use Caitlin Blanc as that example. So what will the general insurance broker market look like in 10 years time for Caitlin? There is no simple answer to this question but one thing that seems certain is the need to ensure that appropriate standards are maintained and enhanced where necessary. With the new regulatory landscape under the Financial Conduct Authority, there has been an increased focus on how brokers, both large and small, create and maintain a culture where good customer outcomes are consistently achieved. The feeling is that those firms who maintain a high level of professionalism are the ones who are likely to achieve sustainable profit and long-term growth. As the UK s leading general insurance intermediary organisation which acts as the voice of the industry on key insurance issues, BIBA is well positioned to help you, our members, along this important road. Today, in large parts of the consumer market, price is the dominant factor. However, in my opinion, and the opinions of a number of respected people in this business, there are still a substantial volume of customers, or clients if you prefer, that do want and need the expertise of a trusted expert insurance broker. Insurance is one of the most complex financial products a customer can buy. It is a combination of law, finance and mathematics of risk, liberally overlayed with what we know as market practice. That won t change in 10 years time. It takes years to become an accomplished insurance practitioner competent to give solid and valued advice about a customer's insurance needs and affairs and we should be proud of our ability to do that.

9 I was recently asked this next question and I confess I had to stop and think for a moment. "Who would you go to for advice about risk and insurance other than an insurance broker?" Well I dismissed accountants, solicitors and bankers and when I got to doctors and vets I was very comfortable that the answer is there is no-one better qualified than a competent insurance practitioner! An accomplished insurance practitioner can and will continue to add priceless value to a customer's protection; of his home, his health, his business and indeed anything else he needs to protect. Everyone here knows that, but the question is how to advertise that to customers that don't know they need us? Insurance is a necessity now and will continue to be so in tomorrow s world; we either have to buy it for legal or commercial reasons or we buy it because we realise it would be foolish to be without it. It therefore needs to be secure and have the reputation for paying all valid claims fairly. My vision is to promote a level of raised standards in our membership that puts us on a footing equal with other professional advisers. Already, brokers are being judged by the courts on standards equivalent to other recognised professions and I cannot see that changing. What does raised standards mean? We are looking at this but it certainly is not just compliance with correct processes and procedures and sticking by the rules. Standards is about ethics, conduct and above all putting the interests of our client before our own interests and maintaining a culture where good customer outcomes are consistently achieved. It is my intention to work with members around the country and our newly appointed boards to establish a practical, pragmatic and long lasting pathway to a prosperous future. A future that Caitlin Blanc will be proud to be part of. Against this backdrop, I confirm that we are launching today a consultation paper, A Pathway to Raised Standards.

10 The purpose of this consultation paper is for BIBA member firms to consider how BIBA can help its members on the journey to raising industry standards. With the regulator likely to focus their attention towards both the larger and smaller brokers, this is also a really good opportunity to show that the sector is taking the initiative to improve standards. It is therefore essential that all members are involved as much as possible in shaping how we achieve this. I know it is an emotive subject but I strongly believe that now is absolutely the right time to tackle this issue. Should we harness the CII s Code of Ethics and the FCA s Principles for Businesses? Is there appetite for BIBA to produce a set of standards outlining the level of conduct expected of member firms? Or perhaps a principles-based code setting overarching principles of good business practice? Or maybe a detailed code outlining exactly what is expected of firms? The consultation paper is now available on the BIBA stand in the exhibition hall and on the BIBA website and I would encourage every BIBA member to engage with us in this process. [PAUSE} Looking ahead to the next couple of days, I believe we have a programme of headline speakers that equals, if not beats, anything we have done previously. I am sure that this morning s panel discussion, entitled Just how good are we at customer service will be enthralling as we see award-winning journalist and BBC Money Box presenter Paul Lewis with Amanda Blanc, Janice Deakin and Kevin Hancock discuss where we are and what more might need to be done. This afternoon our star attraction will be Lord Digby Jones. Now, Lord Digby Jones needs no introduction from me other than to say he is a Non-Executive Director of Leicester Tigers rugby club and a supporter of Aston Villa. In addition to what I am sure will be a fascinating address, Lord Digby Jones will also be making someone s day, by presenting the trophy to the winner of this year s BIBA Young Broker of the Year. Tomorrow our attention turns to the future.

11 With political lobbying becoming increasingly important for the association, to be listened to, we need to understand where the political wind is blowing. And between now and the Conference in 2015 we have European elections, the Scottish independence vote plus the general election. Each of these could have major impacts on members and their businesses. So while our Wednesday sessions are largely insurance focused, our Thursday s keynotes are dedicated to help us appreciate the bigger picture. And we have some real political heavyweights to help us. Tomorrow morning we have our big picture debate, featuring the right honourables Lord Prescott, David Davis and Sir Walter Menzies, or Ming, Campbell. And if that is not heavyweight enough, our conference will be closed by former Prime Minister Sir John Major. Right, my autocue has ground to a halt meaning its time for me to close. Returning to where we started, to the music aficionados in the audience, the best chart topper on this date in history has to be from 1968 Louis Armstrong s What A Wonderful World. Please visit the exhibition hall, do some business, come and say hello to me and the BIBA team. Ladies and gentlemen enjoy the conference!