deVere Group cited in The Economist’s ‘Insurance and Society’ report
deVere United Kingdom’s Head of East Midlands, Mitch Hopkinson, has recently been asked his opinions and views on the challenges faced by the insurance industry since the 2008 crash, and what measures insurance firms took in response, as part of an influential report undertaken by The Economist.
The document includes interviews and analysis from leading figureheads within some of the biggest international finance firms, including Martin Senn, CEO of Zurich Insurance Group, and John Godfrey, director of corporate communications at Legal & General, amongst many others.
According to this study, the key challenges likely to be confronted by insurance companies over the next 20 years are increasingly stringent regulations, macroeconomic ambiguity, low investment returns and rising longevity.
The results showed somewhat of a contradiction in the problems faced by the industry and the measures being undertaken to resolve them. The need for a greater collaboration and enhanced communication between insurers, regulators and other organisations was also highlighted, with the ultimate aim to encourage economic growth.
deVere United Kindom’s Mitch Hopkinson commented that on the whole, insurers could have done more following the recession: “Insurers have not necessarily done enough to say ‘we haven’t created this issue’. They have let life pass them by rather than stepping up and saying they weren’t to blame and they do have an important role to play.”
Also raised in the report was the subject of EU directive, ‘Solvency II’, which has a much wider scope than its predecessor, ‘Solvency I’ which was introduced in 1973. The findings shown in the report show that the majority of insurers are in favour of the directive, the main objective of which is to enhance risk management, reduce ambiguity and to ensure the level of risk comes more into line with capital requirement.
Giving his opinion on this issue, CEO of Zurich Insurance Group, Martin Senn, noted: “Insurers must be well capitalised but regulators must avoid setting overly conservative and detailed requirements. This could lead to an inefﬁcient use of capital and ultimately more expensive prices for our customers. Solvency II must not become a bureaucratic and costly compliance exercise.”
From my perspective, I’m thrilled that Mitch, who is a recipient of the Financial Times ‘IFA of the Year Award’, was involved in such a prestigious report, particularly as he is the only adviser to have been consulted.