The letters from Professor Shamit Saggar and Charles Randell (January 13) are prime examples of the one-size-fits-all mentality among regulators. Both criticise Norman Blackwell’s promotion of the proposed “competitiveness” objective for the Financial Conduct Authority (FCA) and Prudential Regulation Authority solely in terms of its potential impact on consumers (Opinion, January 11).
But the objective is designed more to affect the way wholesale markets are regulated and it is urgently needed. In insurance, the London Market, which includes Lloyd’s of London, earns $121bn in premium each year contributing £40bn to UK gross domestic product — a quarter of that of the City of London.
Two-thirds of this business comes from overseas, making us a predominantly export-led sector. Members of my organisation — London and International Insurance Brokers’ Association — work with sophisticated corporate clients with their own risk management divisions. They seek complex, bespoke insurance coverage and make deeply informed purchases. And yet FCA regulates our community in exactly the same way as it regulates retail insurance brokers selling home and motor policies to the general public. This causes countless examples of unnecessary cost that inhibits business coming to London and affects our competitive position relative to the growing insurance centres in Bermuda, Zurich and Singapore.
The new objective will give FCA an incentive to develop a more nuanced approach and a supervisory regime that reflects the fact that LIIBA members pose a different risk to the regulator’s primary purpose to protect consumers. It will free our sector of pointless administrative burdens and let us get on with providing world-class service to our global client base and leading the UK economy back to prosperity.
Chief Executive, LIIBA
London EC3, UK