Latest fortnightly round-up of insurance, legal and business developments with analysis and commentary from the insurance team at Pinsent Masons.
The main topics we're focusing on this week are:
The Insurance Distribution Directive (IDD) is a new European Directive in force in the UK from 1 October which regulates the distribution of insurance products in the EU/EEA. Repealing and replacing the Insurance Mediation Directive (IMD), the IDD raises the level of minimum standards of insurance distribution in EEA Member States and extends the scope of regulation to include insurers as well as insurance intermediaries.
ANALYSIS: Climate change poses huge questions for the insurance industry, and the implications of major weather events, changing temperatures and shifting land use and availability will be felt by insurers for decades to come. A Lloyd's City Risk Index report published in collaboration with Cambridge University this year said that $123 billion of the world's GDP is at risk every year in cities affected by climate change, and most analysts agree that the effects of climate change will increase over time. Although the risks and challenges for insurers are significant, insurers are uniquely placed to bring about positive change through innovation.Some of that innovation is already happening.
The UK's financial services sector has scope to grow in Asia, a government minister has said. Economic secretary to the Treasury, John Glen, is visiting the continent this week. In comments published by the Treasury in advance of his tour, Glen said there are opportunities for growth post-Brexit. "We're stepping away from the EU, but we are not stepping away from the world," Glen said. "The UK and Asia have so much more room to grow together, especially in financial services."
Insurers have been urged to carry out a review of their organisational structure and ways in which they encourage career progression after an industry report called on firms to do more to help women into top jobs. The Association of British Insurers (ABI) published a report last week which highlighted the lack of women occupying senior jobs in the insurance and long-term savings industry. While firms are doing a "good job of attracting women", the proportion of female employees falls by 60% between entry and senior levels of organisations in the industry, the report said. Motherhood was identified as the single biggest factor behind the lack of women in top jobs.
The majority of UK businesses have still to formally assess the risks they face from the UK's scheduled exit from the EU, a recent survey has found. The British Chambers of Commerce said that 62% of the 2,530 companies it had surveyed "still haven't completed a Brexit risk assessment". The survey was carried out in August. Brexit expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said it is not too late for businesses yet to undertake a Brexit-assessment impact to do so. "A particularly effective way of identifying potential Brexit risks and opportunities can be through a structured scenario planning session, bringing together the functional leads within an organisation for areas such as procurement, commercial contracts, finance, risk, data and HR," Lougher said.
The role that data can play in improving competition, innovation and consumers' experiences in the UK's financial services, energy and telecoms markets is to be considered in a new cross-government review. The 'smart data review', opened by the government late last week, will look to understand how best to open up business' access to data to help them deliver new services to consumers, the government said. "New technologies have the potential to address many of the problems consumers face in regulated markets and strengthen competition," the government said. "These include innovative intermediary services such as automatic switching services and utility management services, as well completely new business models and providers."
Insurance briefing is a round-up of legal and business developments published on Out-Law.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.