FSA challenges insurance buyers

Buyers need to raise their game to improve contract certainty

Risk managers must do more to influence change in the culture of the insurance industry and exercise their power within the buying process, said the UK regulator the Financial Services Authority (FSA). Insurance buyers and risk managers are partly to blame for the “deal now, detail later” culture that has characterised the insurance industry’s lack of contract certainty, according to the supervisor. In a speech to risk managers at the annual conference held by AIRMIC, John Tiner said that he couldn’t understand the apparent willingness of insurance buyers to accept poor levels of contract certainty which often means that they “do not have evidence that you have cover, and that you have in fact transferred the risks from the balance sheets of your corporations to the balance sheets of insurers”.