Increased regulation could hit product innovation
The consequences of increased regulation could pose a risk to innovative products – a topic which will be a big talking point for attendees at this year’s International Insurance Society (IIS) Seminar, which is taking place in London this week.
That is the view of Hugh Savill, director of regulation at the Association of British Insurers.
“We believe the level of regulation is very high, particularly on conduct regulation where the FCA is moving on to a much higher set of tests for customer outcomes across the life cycle of the product,” he said.
“While this will not stifle the industry if done sensibly, there is always a risk to innovative products.”
Savill also says that capital requirements and rigid hiring processes are risking the attractiveness of the UK as a market.
“The level of capital required by the PRA, and the stiff tests for the approval of senior posts, really do put at risk the attractiveness of the UK as place for groups to do business,” he said.
Speaking ahead of the conference, Savill also said that digital insurance, its impact on products and the increased use of big data would be high on the agenda for discussion at the Seminar, but didn’t expect EU membership to gain much momentum.
“We don’t think that EU membership will be big at this international conference,” he said. “The biggest challenge would be having laws made on insurance that we would probably have to comply with (certainly in the case of groups operating in Europe) but have no way of influencing them.”
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