Former civil servant Stephen Haddrill , the new head of the ABI, talks to Peter Madigan about his hopes for the organisation, the reach of FSA regulation and the problem with working parties
Having forged a career in the civil service, it might have seemed an odd career move for Stephen Haddrill to decide to leave the comfort of the public sector to accept a position as the director general of the Association of British Insurers (ABI). Recruited directly out of university into the Department of Energy, Haddrill has spent over 25 years working in various branches of government, most recently as director general of the Fair Markets Group at the Department of Trade and Industry. So how is he finding his new role?
"Well, I seem to spend most of my time travelling around the country visiting members and listening to the issues they feel strongly about. I then spend a lot of time talking to government and speaking to ministers about members' concerns," he explains.
Considering his extensive experience working in government, it would be easy to assume that Haddrill has a natural affinity with the workings of Whitehall that may give him an edge in knowing how to launch the most effective lobbying campaign. "I imagine that my time at various departments may give me something of an advantage, yes," he admits.
Having only assumed the director generalship in May, Haddrill seems to have found his feet. He is certainly in no doubt about what is at the top of his agenda: "Improving the reputation of the insurance industry and regaining the trust of consumers is our top priority," he says. "Our job is to influence government and the regulator and make sure that we explain to them what this great industry of ours is capable of delivering to ensure that the industry can grow and become more competitive. By doing all of this it can only mean that insurance customers will receive better service."
Legislative changes
While such proclamations of intent are to be applauded, the immediate issues facing the trade body are not quite so lofty, but somewhat more pressing. With A-Day fast approaching, a considerable portion of Haddrill's time is occupied by preparing for the challenges that pension simplification will bring.
"At the moment the association is talking a great deal with the government ahead of the release of the Turner Report, which will be published in a few weeks' time," he explains. "We want to make sure that our members will be fully prepared for April next year."
While the tests posed by pensions simplification are substantial, Haddrill stresses that the ABI's remit goes further than just liaising with Westminster on UK issues.
"Somewhere between 50% and 70% of all regulation comes from Brussels, so we also spend time talking with the European Parliament," he says. "Our primary concern in speaking with them is to prevent the implementation of unnecessary duplicate regulation and to ensure that our members' voices are heard ahead of the introduction of EU regulation such as the Markets in Financial Instruments Directive."
Working parties
For many members of the ABI, their first point of contact with the association is through the various product committees known as working parties. Some parties are more than just forums for debate and also have a policy-setting agenda, such as in the case of the critical illness (CI) working party, which decides which definitions will be tightened and changed on behalf of all members.
Considering the influence that working parties can wield, some insurers have expressed frustration that a relatively small group of people makes such decisions while not all members of the ABI with a vested interest are represented. Does Haddrill have plans to expand working parties and make them more inclusive?
"What we must have in the ABI is reasonably sized and effective working parties with a membership of around 10-15 people. It's really in no one's interest to have a working party that could fill the Royal Albert Hall," he says. "Having said that, we are always absolutely delighted if we get enthusiasm from members who have not tended to get involved before."
"There is already a strict rotation in relation to all the positions on the working party to ensure that all members have a chance to be represented, and that includes the chairmanship," he adds.
Defining opportunity
The ongoing consultation into reviewing the CI definitions has also raised the issue of how much involvement advisers have in the decision-making process. Although it is ultimately the IFA that has to sell such products, they play a relatively small part in shaping the next generation of CI cover, something that some are unhappy about. Haddrill, unaware of such complaints, vows to investigate. "I'll look into the issue of intermediary consultation in the case of the CI working party," he pledges.
Perhaps even more important than the association's liaisons with government is the ABI's relationship with the Financial Services Authority (FSA). It is a relationship that, from time to time, can be fraught. "The FSA's job is to implement the legislation and regulation of the government. Our job is to talk to the FSA to ensure that the opinions, interests and concerns of our members are heard. Of course, we do disagree on things and we make no secret that we have had differences of view on occasion, but on the whole our relationship is constructive."
At the top of the FSA's agenda in the last year has of course been the implementation of regulation for mortgages and general insurance. Although the shockwaves now seem to be dissipating, and both providers and intermediaries are growing accustomed to the regulated regime, Haddrill feels the new system is not without its flaws.
"We think that regulation has been very good, and been effective, but there are a couple of areas in which there is a risk that the regulations could be a little overreaching - such as the degree of advice and information that has to be given to the customer. It is all very well and good in principle to give people information, but if they don't understand what they are reading, or they just don't want to read it, then there is no point in doing it," he says.
Aspirations
Given his propensity for speaking on behalf of the ABI, it is unsurprising that Haddrill is reluctant to distinguish his own private objectives from the wider goals of the association and the people who work alongside him. "In these sorts of jobs in the policy-making environment you work with other people - and that is the great joy of it, really," he says.
When pushed, however, Haddrill reveals what he would like to achieve during his tenure as director general. "I want to improve the reputation of the insurance industry as a whole and to regain people's trust, and I want to explore ways to improve worker pension provisions. In addition, we'll be working alongside the Department of Work and Pensions to improve access to rehabilitation services and get more people fit and back to work."
These are noble goals and certainly Haddrill should be congratulated for the ambition he displays. Whether or not he will be able to take these aspirations and turn them into a reality, we'll have to wait and see.
CV
2005-present: Director general, Association of British Insurers
2002-2005: Director general, Fair Markets group, Department of Trade and Industry
1998-2002: Director, Consumer Affairs/Employment Relations, Department of Trade and Industry
1994-1998: Director, Competitiveness Unit, Department of Trade and Industry.
