He said: “Our industry took its eye off the ball in recent years. The embedded value accounting system did not help, with its over-emphasis on new business and new business profits.
“The industry became mesmerised by new business, writing it at too high a cost, acquisition costs were unsustainably high, product complexities were designed and concealed commission and poor sales behaviour was condoned rather than stamped out.
“Our hunger for ever-increasing new business numbers was insatiable. Just like people at large, our short-term wants overrode our long-term needs.”
Cazalet Consulting director Ned Cazalet told delegates: “The UK life assurance sector spends about £12bn a year, of which £7bn year in year out is spent on writing new business. We have been burning money like it was going out of fashion.”