Legal and General’s announcement yesterday (13 August) that it would stop its membership of the Association of British Insurers has raised questions over membership benefits, however other insurers are standing by the trade association.
In a statement L&G said that as its business has evolved over time, a large proportion of its business lines now fall outside the ABI’s remit.
It added: “In the future we believe engagement with government, regulators and other external bodies will be more individually tailored, and less suited to uniform representation through one trade body.”
The ABI’s director general Otto Thoresen responded with disappointment, but reiterated that the association’s board believes the industry is at its most effective when working together to respond to legislative and regulatory change.
The move echoes Skandia UK’s 2008 decision to exit the ABI, citing similar concerns around its business not being aligned with most ABI members.
Peter Mann, chief development officer at Skandia, said at the time: “When it comes to lobbying on key issues, we find bodies such as Aifa more closely aligned to our strategy going forward.”
However, other insurers have reaffirmed their support for the insurance industry body.
Speaking to FTAdviser, Standard Life’s managing director for adviser and workplace Barry O’Dwyer, said: “We believe our industry achieves a great deal by working together and the ABI plays an important role in helping to deliver the right outcomes for UK consumers. We have no plans to change our membership of the ABI.
“Through agreed codes of conduct and by influencing reform, membership brings real value for our customers. Pensions reform has been ongoing and following this year’s Budget, our industry is readying itself for another watershed change next year, when people will have increased flexibility around access to their pension savings.
“The ABI and its members have been working with the government and the regulators to help achieve the best and most practical outcome around these changes for customers.”
Jon Dye, chief executive of Allianz Insurance, told FTAdviser: “The ABI performs a very useful function on behalf of the industry and has had some notable successes including the Flood Re initiative and gaining the support of government on measures to tackle the cost of personal injury claims.
“We believe it’s better for us as a company to take an active role within the ABI and that remains our position.”
A Prudential spokesperson said: “Prudential believes it is important for insurers to have a forum for discussion about issues affecting the entire industry and a strong collective voice, especially at a time of change both in the UK market and evolving domestic and international regulation.”
NFU Mutual, LV, RSA Group and Aviva all stated that they intend to remain members of the ABI, but did not wish to comment any further.
Earlier this year the ABI announced that it will merge its investment arm with the Investment Management Association to form a new trade body that will more broadly represent the interests and provide greater oversight of fund managers.