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Are regulatory hurdles stopping new protection entrants?

Wallace Dobbin Intrinsic 480

Intrinsic legal and governance director Wallace Dobbin is concerned economic and regulatory barriers are putting off new distributors and providers from entering the protection market.

Insurers are currently contending with a number of new regulatory issues which experts have predicted will make them more risk-adverse and will force them to push up premium prices.

Solvency II, which sets out rules for how much capital insurers have to hold against various assets, depending on their risk and duration, is due to be implemented by January 2014. Insurers say they will become more risk-adverse as a result of its implementation.

Insurers also have to formulate new propositions to deal with the European Court of Justice’s decision to ban price differences based on gender, which comes into effect on 21 December and is expected to push up women’s life premiums by up to 20 per cent.

Speaking last week at the protection review conference in London, Dobbin said: “It is absolutely necessary that we get a continual inflow of new players and competition in the marketplace is absolutely vital.

“My great fear is that the economic and regulatory barriers will be such that it will put off new players from entering this market, whether they be from the existing industry or whether they be from outside the industry. So I am quite fearful we will not get the degree of customer choice, distributor choice and product provider choice, that the marketplace needs.”

Life Cover for All partner Mike Weedon says: “I do not agree that new start-ups will be put off from entering the sector. Protection is at the forefront off people’s minds at the moment with the introduction of the gender directive, which will throw up new opportunities and chances to innovate.”


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. It amazing how long it takes for the hierarchy to come to the same conclusion as the rank and file – bad regulation is more dangerous than the problems it is designed to address.
    Doesn’t help when the Regulator is permanently looking the wrong way.

  2. Regulation will slowly strangle us all. The world is full of risk, to try and negate it is futile.

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