Insurance, 2020 Vision and the TUC

Thursday 13th August 2009

First of all my sincere thanks to Victoria, and Introducer Today for giving me this opportunity to write my very first blog article.

I have provided some news updates for clients, in the past, a collection of random news snippets that I thought might be of value to others, joined together with some asides, opinions and my undying support for the Hammers.

My objective is to get some debates kicked off that might prove valuable or at least of interest to you, your clients and your business.

Something you might want to read either on the beach or on the train to and from work is the recently published report -Vision for the insurance industry in 2020 - from the Insurance Industry Working group. Its on the HM Treasury website www.hm-treasury.gov.uk

Don't let the date in the title put you off reading the report, as many of the challenges are already here today.

Take my own particular favourite, the protection gap. (page 12 of the report)  encouraging people to take action to protect themselves and their family against risks and examining whether the insurance industry could provide solutions currently provided by the State.

The report has certainly ruffled the feathers of TUC general Secretary Brendan Barber. He has already issued a press release in response to the report's suggestion that insurance companies could start paying benefits such as unemployment and sickness.

He said: "Whilst the TUC is willing to talk to insurance companies about concrete proposals on welfare state payments, at first sight these proposals raise serious concerns. Who would pay for these insurance policies? National insurance is split between employers and individuals equally, but here individuals may have to take on the whole financial burden. Those who need protection the most would be at risk of going uncovered as they would have to pay the most - this would be the opposite of the Welfare State. Our experience of mortgage insurance for unemployment is that there is a lot of small print which rules many people out of compensation when they come to make a claim – it is likely these policies would have similar get-out clauses which could leave people vulnerable."

What do you think about the possibility of insurance companies handling benefit claims? One thing is for sure the benefit system has to change because it is becoming unmanageable.

Also if Brendan thinks insurance policies are complicated he should have a look at some of the income support rules.