Responding to recent reports on the status of UK insurers, Peter Vipond, director of regulation at the ABI, said the British insurance industry entered the current period of market turbulence in a far stronger position than in 2003.
According to Vipond, firms have changed their business models in recent years and now rely far less on equity holdings.
On top of this, they have also introduced a new generation of risk controls, which require them to use realistic numbers for assets and liabilities and stress the actual risks their business will face.
"None of this means the industry is complacent- there have been major falls in key markets- and there is no guarantee that the current market conditions will come to an end soon.
"These conditions, coupled with the specific challenges of bank recapitalisation, pose real issues.
"But this should not be confused with the underlying strengths of this industry.
"General insurers will go on providing insurance to people’s homes, cars and businesses that they need; and the Life Insurers will go on providing savings and pensions as before.
"Insurers are long term businesses and will protect customers in the difficult times as well as the good ones."