The risks of tomorrow are ever-changing. Responding to this and boosting resilience for the millions of customers who depend on insurance and retirement products requires adaptation, collaboration and innovation. As the ABI – the voice of the UK’s insurance and long-term savings industry – marks the milestone of its 40th anniversary, we commissioned WPI Economics to look at the sector’s role over the next ten years ahead.
Based on research, expert interviews, consumer polling and business engagement, ‘A Ten-Year Vision for Prosperous and Secure Households, Communities and Businesses’ has identified five key priorities where the industry – working with its partners – has a central role to play and the actions it should take.
- Tackling changing risks
In 10 years’ time, climate change and AI-bolstered cyber threats will have radically changed the nature of the risks faced by households, communities and businesses. The industry has evolved its approach to managing risk throughout centuries of social, technological and economic change. Close collaboration with industry, government and regulators, supported by innovation, will be required to effectively respond to the new and more complex challenges.
- Building household financial resilience
The economic challenges that people and families will face over the next decade further underline the importance of improving financial resilience. Half of UK consumers are worried they are not saving enough for the future[1]. Auto-enrolment has been an extraordinary success in increasing participation in workplace pensions, but it will not deliver the retirement outcomes needed without urgent action to increase saving levels and engagement with individuals now responsible for their own decision-making. A roadmap to saving more is needed to support savers, businesses and the economy.
- Supporting business and growth
The insurance and long-term savings sector can play a critical role in addressing growth by helping businesses manage risk, investing in high growth businesses, and exporting specialty insurance to international markets. The sector cannot do this on its own – it demands an agile regulatory system, which can support growth. The UK needs to double down on competitiveness for financial services to continue to grow its share of the global insurance market.
- Future-proofing the UK’s workforce
Health and protection insurance supports an increasing number of people with their physical, mental and financial wellbeing. With half of consumers worried about how they would cope financially if they or a family member were off work because of ill-health[2], it is critical to identify how the sector can protect more people than it does today. By ensuring all employees have access to appropriate health and financial support when needed, more people can be given appropriate treatment and practical support to remain in work when they fall ill.
- Leveraging technology and data for good.
Data is at the heart of everything the sector does. Innovation has the potential to deliver benefits to the industry’s customers via better services, wider coverage and lower premiums. The key action for the industry is to embrace continuously reinventing insurance, so that the technologies of the future drive better outcomes for customers and the sector alike.
Anniversaries are an important moment for reflection but of equal importance is pausing to take stock of what’s ahead. The UK’s insurance and long-term savings sector has a vital role to play in supporting growth, boosting resilience and providing peace of mind for the benefit of millions of customers. This report from WPI Economics starts an important debate for the decade ahead on where we can collectively place our greatest focus and together, drive change through a strategic response.”
Hannah Gurga
ABI Director General
The next 10 years will see a wave of economic, demographic, ecological, and technological forces combining to change the world we live in. One common thing these myriad changes bring is uncertainty – something the insurance and long-term savings industry has more expertise than many in managing. The task now is to apply this strength to get ahead in a decade that will change the fabric of the sector and the world it operates in. This report shows how vital the industry is and how it can best help society navigate these changes.”
Joe Ahern
WPI Economics’ Policy Director