A healthyposition

Richard Walsh is a man who is used to thinking on his feet and dealing with a crisis. Now head of health at the Association of British Insurers (ABI), he worked at the Department of Health for 11 years. During this period he dealt with infectious disease control and public health at the time of both Legionnaires' disease and water-born disease outbreaks, while Edwina Currie was resigning over the 'egg' fiasco. He also worked with Kenneth Clarke on NHS reforms and the first wave of NHS trusts and was responsible for the drugs bill on GP prescribing ' dealing with a budget of over £3.2bn.

Keeping a cool head in a high pressure environ- ment seems to be a running theme in Walsh's career ' skills which must be welcomed in his current work at the ABI. Issues such as the debate over genetics and insurance, premium hikes on guarantee rates for critical illness (CI) and the introduction of Financial Services Authority (FSA) regulation are just some of the complex, and at times controversial, areas Walsh is involved with.

Having moved from the public sector, Walsh has been able to look at the industry with a fresh viewpoint and has been taken aback with what he has seen.

'I have been very impressed with the professionalism of the industry,' he says. 'Some of the decisions that need to be made are difficult and a huge amount hangs on them ' in a way more so than in the public sector, as it is ministers who make the final decisions. In this industry you are concerned about the survival of your company and if you make the wrong decision then it is pretty critical.'

Walsh has been at the forefront of discussions over the use of genetic tests by insurers and was key in implementing the current moratorium. It is this kind of strategy work where he feels he has the most to give in his role at the ABI and which he also finds most satisfying.

'When I arrived here, the industry was at war with the Government and vice-versa. It was a mess and the industry was getting nothing but bad publicity about it, so I was pleased to make the deal we have to create this breathing space,' he says.

Straddling the medical and insurance worlds means staying on top of a lot of information and getting to grips with emerging issues, fast. This includes understanding the concerns of all involved parties, including health professionals.

'Doctors have moved from a position of 'doctor knows best' to one where their work is open to public scrutiny and they have to justify what they do. Going forward, this is something that will affect the insurance industry too. It is certainly something that is affecting genetics, where we can only use tests which have been approved by the Genetics and Insurance Committee ' this is very different to how the rest of underwriting is carried out, where actuaries are not subject to public scrutiny.'

As Walsh says, issues affecting the healthcare profession can have a knock-on effect on insurers. It is up to the ABI to ensure its members are pro-active in their dealings with the medical world.

'The industry needs to be on the front foot and not simply reacting to what others are saying,' he says.

Forthcoming regulation is another area where the ABI is taking a progressive approach. According to Walsh, the industry should be discussing what it wants from the new rules so it can give a considered response to the finer details once they are released.

'Although we are speculating, we need to ask what our position would be if they go a particular way,' he says.

One point the ABI will be pushing on regulation is the need for it to be proportionate. As Walsh says, the new rules are not being developed because of any consumer detriment and, long term care aside, up until now there was no intention from the FSA or the Treasury to regulate PMI or protection products.

'One of the things we will be raising with the FSA when they are trying to come up with solutions is ' can you tell us what the problem is first? What we do not want to see is solutions from other business areas that are regulated, which were set up to address a particular problem within those areas simply being replicated for general insurance and protection products if those problems do not exist,' he says.

However, Walsh does believe having one sole regulator for the industry will make it easier for advisers to explore new product areas with minimum hassle.

'One of the benefits of regulation is consistency,' he says, 'advisers do not have to have lots of different regulators for different products. The beauty of having regulation under the FSA is it means there will be one regulator. It will help advisers who want to sell multiple products, which will help consumers in turn.'

As for product lines advisers should be embracing over the next few years, Walsh says income protection (IP) could become a real growth area. With so many CI plans being sold by lenders alongside mortgages, he says many people could have the wrong protection in place and perhaps be better suited to an IP product.

'Income protection gives long-term protection that you do not get with critical illness. With medical advances, conditions that were once life threatening, may not be in the future ' in which case the lump sum benefit may not be what they need, they may be much better off with an income,' he says.

Group private medical insurance will be the other growth area for the future, according to Walsh. With no help of State assistance to promote individual plans, he is hopeful that some kind of tax incentive for group schemes could be a more attractive proposition to the Government.

'The Government is still showing no inclination at all to support private medical insurance, in fact it uses every opportunity to attack it. This is a shame because in fact it contributes a lot to the NHS. However, on the corporate side, all the evidence from the US says you need to give incentives to small companies. If the Government provides incentives, then that would be the most cost-effective way of increasing private medical insurance uptake,' he says.

Having been in his current role for just 18 months, Walsh is in no hurry to take his next career step. However, one area that he has mapped out is to stay working in the healthcare sector, dealing with whatever challenges it inevitably throws up.

'Health is a fascinating subject, especially in the UK as it is so political ' everyone has an opinion about it and everyone thinks they can fix it,' he says, 'I like working in health and I cannot see myself moving radically beyond that. It is a huge area. I like working with people and I like working with the Government, consensus building and lobbying. I enjoy the rough and tumble of politics ' that is what makes me tick.'