Press criticism prevents people saving, insurance chief claims

Richard Harvey, the chief executive of Aviva and chairman of the Association of British Insurers, yesterday blamed "unbalanced" media coverage for the current lack of confidence in the long-term savings and investment industry, complaining the press is too eager to knock insurers.

Richard Harvey, the chief executive of Aviva and chairman of the Association of British Insurers, yesterday blamed "unbalanced" media coverage for the current lack of confidence in the long-term savings and investment industry, complaining the press is too eager to knock insurers.

Speaking at the National Association of Pension Funds' annual conference in Glasgow, Mr Harvey side-stepped issues such as the mis-selling of endowment mortgages and the underfunding of with-profits funds, saying the press's criticism of the industry is a key factor in people's unwillingness to save.

He was specifically damning of the coverage of a Treasury Select Committee meeting earlier this year at which he, along with four other major life-insurer chief executives, was interrogated over the state of the UK savings industry.

At the meeting, John McFall, chairman of the TSC, criticised the insurers' handling of the endowment mis-selling scandal, as well as the high levels of pay that the top executives are awarded. "The industry is going downhill like a slalom skier," he said. "It has failed to do anything without being dragged along by the FSA (Financial Services Authority) and has put its own interests ahead of consumers."

But speaking yesterday, Mr Harvey said the media unfairly highlighted the negative comments from the meeting, omitting the more positive aspects. "I think that if you went to that select committee meeting, you wouldn't recognise it from the way it was depicted in the press," he said. "I'm not saying that what was reported was wrong, but it was unbalanced."

Consumer groups and MPs were quick to criticise Mr Harvey's remarks, saying he was passing the buck and diverting attention from the real issues.

Mick McAteer, a senior policy adviser at the Consumers' Association, said the comments demonstrated the continued arrogance in the insurance industry. "For a sector that has caused more social and consumer detriment than any other that we've come across, it is the height of arrogance to try and put the blame on the media."

Mr McFall said yesterday: "I think that the committee identified a fundamental issue with the business model in the insurance industry - and an issue of the duty of care to customers... These are the real issues which need to addressed."

Mr Harvey and the four other insurance chief executives - Prudential's Jonathan Bloomer, Legal & General's David Prosser, Standard Life's Sandy Crombie and Andy Haste of Royal & SunAlliance - will face the committee again in two weeks, as part of the TSC's inquiry into the long-term savings industry.

Since the last meeting, it was revealed that Mr Harvey's pension was topped up by more than £1m last year, taking his total annual remuneration to more than £2m.