Insurers’ professional conduct sometimes falls short and distrust of the finance sector is not confined to investment banking, the boss of Britain’s financial watchdog said on Tuesday.
“You may think there is a world of difference between you and an investment banker, consumers don’t necessarily draw such fine distinctions…a lack of trust in financial services is a problem for the industry as a whole,” Tracey McDermott, acting chief executive of the Financial Conduct Authority (FCA), said in the text of a speech at an Association of British Insurers’ conference.
“The conduct of insurers has not always been something to write home about.”
McDermott cited issues around transparency in the general insurance business in the sale of “add-on” products.
She said insurers needed to “meet the challenges” of keeping data safe from cyber attacks, both in providing insurance to companies and as potential targets of attacks.
Other challenges for the industry included overseas competition, an oversupply of capital in the sector, low interest rates and falling prices, McDermott said, in addition to “significant regulatory and legislative change in recent years”.
Addressing insurers’ roles as long-term investors, the FCA would create and chair a UK debt market forum, working with the industry and government to boost primary debt markets in order to stimulate economic growth, McDermott said.
(Reporting by Carolyn Cohn; editing by Adrian Croft)