View more on these topics

L&G quits the ABI

Legal & General is set to cancel its membership of the Association of British Insurers.

In a letter to ABI director general Otto Thoreson, L&G chief executive Nigel Wilson says the firm has been reviewing its membership after the the trade body’s investment affairs division was merged with the Investment Management Association.

The insurer also believes it will be able to lobby more effectively if it does so alone.

The letter says: “Following the recent change in the constitution and mandate of the ABI as a result of the transfer of investment business to the IMA, we have given considerable thought to the question of our continuing membership.

“This is a reflection of the fact that a large proportion of our business lines will fall outside of the remit of the ABI given that the business of Legal & General has significantly evolved and in 2014 our business is now as much investment management as insurance.

“There is also a recognition that even within the insurance sector the ABI often concentrates, for understandable reasons, on the general insurance sector where as you are aware we have only limited business lines.”

Wilson also cites competition issues, with the industry increasingly required to share commercial information with Government.

He says: “Our public policy work increasingly involves sharing commercial aspects of our business with government which, for very obvious reasons not least Competition Law, we cannot share with competitors.

“We believe that increasingly engagement with government, regulators, quangos and other external bodies will be on a case by case basis going forward and will have to be more individually tailored to individual company situations as business models of sector participants become more diverse and less suited to uniform representation through one trade body.”

Responding to the announcement, Throreson says: “As a trade association, of course we are disappointed by the resignation of a member, however the ABI’s continuing strong membership represents over 90 per cent of the insurance sector. 

“The great advantage of the ABI is that our members work together across the usual corporate boundaries to tackle issues that are important to consumers and to deliver an agenda for reform.”

The move means L&G chief executive Nigel Wilson will step down from the trade body’s board. Two years ago, Wilson’s predecessor, Tim Breedon, chaired the ABI.

The ABI, which was formed in 1985, has around 300 members, which account for around 90 per cent of the UK’s insurance sector.

In March, Money Marketing revealed two major providers had raised the possibility of quitting the ABI if it did not insist on Chancellor George Osborne’s “guidance guarantee” was offered independent of members.



PRA set for oversight of Solvency II capital discounts

The Government has proposed allowing the Prudential Regulation Authority to approve liabilities insurers feel are less exposed to market volatility and so require less capital to be held against them. Introduced as part of Solvency II, the “volatility adjustment” mechanism is intended to reduce the capital required to be held against those liabilities that are […]


Advisers back risk-profile ‘ticking time bomb’ warning

Advisers have backed warnings that risk-profiling tools could represent a ‘ticking time bomb’ for the advice industry. Last week, The Platforum cautioned some investors and advisers were over reliant on risk-profile scores. Advisers say they fear some are also using risk profile tools to cut corners. Derbyshire Booth managing director Greg Heath says: “We would […]


Govt plans IHT trusts crackdown

Government ministers have drawn up plans to crackdown on savers using IHT trusts to reduce their tax burden, The Daily Telegraph reports. According to the report, policymakers are concerned that growing numbers of people are using trusts to reduce the amount of tax they pay after death. It says HMRC plans to target IHT trusts […]


Bank of England denies Scottish currency talks

The Bank of England has rejected claims from the Scottish government that the two parties have held talks on a currency union in the event of a Scottish Yes vote on independence. The Daily Telegraph reports the Bank took the unusual step yesterday of challenging claims by Scotland’s finance secretary John Swinney that “technical discussions” […]

Retirement - thumbnail

Pension freedoms: stop the scams

At the beginning of 2015, we highlighted that the new pension freedoms that come fully online on 6 April also represent a very attractive opportunity for the criminal fraternity to scam savers out of some, or all, of their accumulated retirement savings.


News and expert analysis straight to your inbox

Sign up


There are 5 comments at the moment, we would love to hear your opinion too.

  1. Methinks only reason they are leaving as ABI OMO is hurting the sales especially with the huge slump in the market

  2. You may be correct Derek but it is worth remembering that Companies exist to make money. One may expect them to be professional and ethical, but not necessarily altruistic.
    Consequently it is important to reflect that if the motivation is profitability then one should look at the underlying state of the market. Is there a problem because of low natural take-up of a product, which would infer that it has run its life, or is the low take up because of never ending changes to “improve” the product which in 90% of instances makes the product worse.

  3. This is the company that pushed for Stakeholdr and subsequently a 0.5% price cap ! Given these stances were absolutely blatant self-interest, i think the rest of the insurers should be delighted they have left.

  4. In my own experience their annuity rates a miles short. (This week best £19,150 – L&G for same fund and conditions £16,979.)
    I believe that they are not that interested in individual annuities anyway as they are major players in the bulk market.

    The big insurers are becoming ever more detached from the intermediary market (witness Pru, Aviva as well) not to mention the general antipathy of the general public. They are setting their stall in the UK for group and corporate business and are expanding in areas abroad where they can practice their shenanigans with less Regulatory impediments.

    The ABI is an anachronistic dinosaur that mainly chases its own tail.

  5. I haven’t worked for L&G for several years but I can assure Derek that when I did, there were no indications that the business was attempting to keep pension customers as annuitants unless it was in their interests.
    I don’t know what the motivation for leaving was, but given the FCA’s focus on conduct, I doubt it was so that they could bend the rules. Just my opinion.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm