2014 has been a difficult year for the insurance industry, and Simon Gallagher, head of Insurance Industry Group at Moore Stephens warns that this could be just the beginning:
“The main challenge for the insurance industry over the coming year is to compensate for a tough environment to make money while being seen to be treating customers fairly in an invasive regulated environment. Insurance firms must face up to the challenge by demonstrating at all levels of their business cultural change that puts clients first.
Make or break for Solvency II
“The re-energising of Solvency II will see insurance firms weighing the expense against the benefits of compliance in the lead-up to 2016 implementation. 2015 will be the make or break year for all EU insurers and evidence strongly suggests that the industry still has much to do to ensure that individual capital models are roadworthy for the Solvency II journey.
It’s getting personal
“Increasingly, senior management is being required to demonstrate regulatory compliance, and failure to do so is drawing high-level personal fines. The greater focus seen in 2014 on the use of Skilled Persons reports by the PRA/FCA is likely to continue throughout the coming year, in the drive to identify and penalise corporate governance and risk management shortcomings.”
Customer always comes first
“Elsewhere, the regulatory focus has been very much on the customer. This will continue as the FCA pursues its programme of monitoring the fair treatment of customers through its thematic reviews and other initiatives. A number of hefty fines in the past 12 months confirm that the industry has yet to get to grips with this issue.”
|
