The ABI struggles to restore industry confidence
Like a beaten fighter on the verge of defeat, the Association of British Insurers' (ABI) reputation has recently been battered from pillar to post following a series of gaffes, slip-ups and public embarrassments that would cause even Boris Johnson to wince.
Chief among these was ABI's head of health and protection Nick Kirwan's assertion during a roundtable discussion that, in hindsight, the release of claims statistics for critical illness (CI) products was something that should not have been done. Kirwan was referring to the negative press that trumpeted the 'one in five' ratio of claims being turned down. In fairness, despite accusations of 'doing a massive back track', Kirwan later tried to defend his remarks by claiming he had been quoted out of context. However, the damage had been done and various IFAs queued to pour scorn on the body.
Adding to the ABI's woes was Tom Baigrie, managing director of LifeSearch, whose speech at his company's annual awards in February referred to the ABI's 'misjudgement' in its publishing of claims statistics. At that point, representatives of the ABI in the room stiffened behind polite smiles as they were excoriated mercilessly in front of the entire industry.
Most recently, there has been bad feeling towards the body over its preliminary response to the Competition Commission's findings on payment protection insurance (PPI).
A statement released said: "We are very concerned that the Competition Commission's proposed remedies could destroy this market, particularly when we face a period of economic uncertainty."
One IFA labelled the statement put out by the body as 'a disgrace'; it was felt that the ABI, by taking the middle ground, had backed away from making an honest statement about the controversial product.
The PPI market has long been a bad apple threatening to poison the rest of the barrel; it has been obvious for years that the sales processes behind the product have been questionable. The unsuitability of PPI and the potential for a mis-selling scandal has long been an open secret in the industry. In refusing to fully acknowledge the deficits of PPI, the body has been seen to lose credibility.
If it wants to recover lost ground, the ABI has to make a difficult choice: does it wish to be a representative of the PPI industry or a champion for the consumer? Right now, in trying to do both it is doing neither.