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.