Government criticises UK insurers

JOHN WILLCOCK

Financial Correspondent

The Government yesterday slated the British insurance industry for being in-bred, too slow, low-tech and too small.

The report, The insurance industry in the United Kingdom, was commissioned by Michael Heseltine when he was President of the Board of Trade to examine the competitiveness of the industry.

Yesterday, key industry figures defended their companies against the charges, but admitted that some of the criticisms had struck home, particularly the need to recruit more graduates and to look outward to leading market practices in the US.

Analysts welcomed the report into what one described as "a boring, very introspective, almost claustrophobic industry."

The Association of British Insurers (ABI), which helped the Department of Trade and Industry to compile the 16-page report, admitted that it was "slightly limited in scope".

The ABI has commissioned the accountants Price Waterhouse to produce its own study of the strengths and weaknesses of the sector, which will be " a lot longer", and will be published in October.

The DTI report says that in relation to other sectors in the UK, insurance has "comparatively few graduates for its size".

Too much industry is "home-grown" not only within the industry but within individual companies, it says. Within the executive director and senior management tier, "there are often too few 'outsiders'."

The report continues: "Perhaps as a consequence of being too home-grown, management has tended to be conservative and has not embraced modern management techniques as readily as other service industries. There is a particular shortage of broader-based management training."

The DTI also claims that insurers lack adequate links with universities and that "compared with other industries, information technology is still not used to its full potential".

One senior insurance executive slammed the report for being "really superficial. The research was not very great."

He was particularly irritated by the DTI's complaint that there were no big UK players to rival the likes of Allianz of Germany and Swiss Re.

"This is a French fashion - bigness for its own sake. It doesn't necessarily mean you can get economies of scale. For instance, it is very difficult to sell life products cross-border."

He added that insurance companies were not like car manufacturers - "If you are not global, you die." Smaller British companies may well be more efficient and better placed to innovate, he said.

Comment, page 17

Start your day with The Independent, sign up for daily news emails
Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'