View more on these topics

Insurers could take on social insurance role

Insurers could play a greater role in social insurance in a bid to save £17bn a year in welfare payments under proposals from the Insurance Industry Working Group this week.

The Vision for the Insurance Industry in 2020 report by the group, co-chaired by Chancellor Alistair Darling and Aviva chief executive Andrew Moss, looks at how the insurance sector could take a greater role in areas such as unemployment, ill health, retirement income and the cost of long-term care.

The report says 64 per cent of these risks are underwritten by the Government through unemployment benefit, statutory sick pay and other social insurance. It suggests if the private sector took on a five percentage points’ greater share of the risks, it could save the welfare state £17bn a year although the insurance sector would require £9.7bn in extra capital.

The paper says: “Any shift of the balance from the public to the private sector requires two things to occur – greater consumer uptake of cover provided by the private sector and increased capital must be attracted to the industry to fund this growth.”

Munich Re head of marketing Andy Milburn says: “I am pretty sure that most reinsurers would welcome the opportunity to have a look at this idea and see how we could help insurers in the UK to pursue any opportunity this brings.”

But Highclere Financial Services partner Alan Lakey says: “Given the economic climate, with very little capital around, I am struggling to imagine why insurers would want to do this.”

Recommended

Website Comments: On whether a Tory Government may change the RDR

If the Conservatives form a Government next year and take a decision to abolish the FSA, a piece of complex legislation will be necessary, accompanied by a major period of regulatory personnel changes. I cannot see that being done by 2012.

House rules

There was an amusing, but a little too accurate for comfort, remark made on a satirical comedy show recently. It was at the time of the 40th anniversary of the moon landing and the varying descriptions accorded to the International Space Station were contrasted.

Top title

Money Marketing once again triumphed in the PIMS readership research of top-end financial advisers, comprehensively retaining the crown of top weekly IFA newspaper. The research shows the paper is the most well read and credible weekly title and has the best coverage by a considerable margin. We would like to thank our readers for helping us to stay number one.

Martin Foden discusses how convenience is affecting the construction of fixed income portfolios

In this short video, Martin Foden, head of credit research at Royal London Asset Management, discusses how convenience is affecting the construction of fixed income portfolios. Watch the video in full The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment