The insurance industry is going to have to hit the ground running when it comes to engagement with government, Parliament, Europe and regulators in 2012. The agenda is long and presents some very significant challenges to insurers.

Several of the issues - most notably those around motor and household insurance - take us into some very tricky areas, posing questions about what is insurance for and how should it be priced. The investigation by the Transport Select Committee into motor insurance was prompted by the rising cost of premiums and a desire to understand the reasons for this. That debate has been broadened by the instigation of a full Office of Fair Trading investigation into motor insurance costs.

Running in parallel to that, at least in the minds of many MPs and commentators, will be the increasingly frantic discussions about the future of flood insurance. The need to put in place a scheme to replace the Statement of Principles has thrust this issue firmly back on the political agenda.

You can throw into this already quite volatile mix the aftermath of the payment protection insurance (PPI) scandal, the pressure to create simpler, more affordable life assurance plans and the Law Commission's continued reform of insurance contract law. You may think these are not especially closely related issues but I fear that in the minds of many they will be linked and will prompt them to question what insurance is for?

Industry experts may feel this will be no bad thing as it will create an opportunity for them to set out their stall and clear away some of what they believe are the misconceptions about what should be insured and what people should no longer expect to find included. This may turn out to be a trifle naive: just listen to the ABI's Nick Startling being questionned on BBC TV about insurers' "moral obligation" to offer flood insurance to people in high risk areas to get an understanding of a very common view of the role of insurance.

Rising motor insurance premiums will clearly nag away at policymakers and MPs especially as above inflation increases take their unwelcome toll on tightening household budgets. The only answer is to get a grip of costs and the insurance industry should, if it continues to engage intelligently with this debate, find allies among MPs and the OFT. Insurers feel they need a public policy mandate to tackle some of the more painful and controversial cost pressures such as referral fees, credit hire and vehicle repair bills. All of these are problems the industry has brought upon itself over the last 20 years and which it now feels powerless to tackle itself but by working with Parliament and regulators it may be able to re-establish some control.

Alongside this is the problem of fraud which the industry and its policyholders are both victims of but have yet to create any sense of common interest in tackling. The debates in Parliament may help achieve this illusive unity of purpose and finally get the message home that insurance fraud is not the victimless crime that many people imagine it to be.

It is the flood insurance debate that I think holds the greater political dangers for the industry, however.

Motor insurance costs have obviously grown as an issue that constituents raise with their MPs but the complaints are pretty evenly spread around the country and, crucially, are not connected. Flood insurance is potentially a far more incendiary political issue as the 200,000 households the ABI estimates are most likely to be cut adrift after 2013 if a solution to affordable insurance cover isn't found are geographically concentrated and are already connected through some very well-organised and vociferous action groups. They will be impossible to ignore.

It is hard to see how the insurance industry can make genuine common cause with these groups and the MPs who represent them. It is certainly possible to see them turning up at DEFRA (the Department for Environment, Rural Affairs and Food) to lobby ministers for a government subsidy to ensure that flood insurance remains available and affordable but the moment that isn't forthcoming (hard to see it happening in the current financial climate) the policyholders will turn to the insurers and play the "moral obligation" card.

All the while these debates are going on, those other issues will also be prompting fresh questions about the role of insurance and the ability of the insurance industry to meet the needs of society and UK plc, especially if we really are facing an economically lost decade. It will clearly require maximum engagement with government and policymakers but it will also require more than a little fresh thinking as 2012 unfolds. 

Our MPs are corrupt. Our media is corrupt. Our police are corrupt. To many people those will be the conclusions they draw from the scandals that have shaken these key institutions over the last few years. Many in this country are always quick to highlight corruption in other countries and in organisations largely run by foreigners (such as FIFA), adopting a self-righteous tone that suggests we inhabit an higher moral plain. No more can they do so with any justification.

After two or three years when the media ruthlessly pursued politicians over their expenses and the police quickly waded in with a few arrests the tables have been dramatically turned and the media and police now find themselves hurrying to Parliament at a moment's notice. This afternoon's testimony by Rupert and James Murdoch to the Culture, Media and Sport Select Committee is a seminal moment as it marks a shift in the balance of power between politicians and the media that was unthinkable just a few weeks ago.

But is only a moment and only the start of a potential shift in that balance. Much else will have to happen if we are to look back at these events in a few years time and say that was the moment British politics and the media changed fundamentally.

First, however, let's return to the police. To me the Metropolitan Police bosses who have been falling like ninepins over the past week come across as desperately naive about the ways of politics and the media. In some ways they seem to have developed such disdain for both - reflecting a wider public view - that they lost sight of their real nature. Like many, they did not realise how corrupt and corrupting some parts of the popular press had become. They were supping with the devil when they should have been confronting it. No wonder corruption was rife.

Watching the appearances of senior policeman before the Home Affairs Select Committee I have been struck at times by how unworldly they appear, almost innocents abroad, that it is hardly surprising so much went wrong on their watches. We have to hope that their successors are not so naive and not so dismissive of the power of the press and politics.

Which brings us to the press. There is simply no explanation that can begin to justify what was going on at the News International newspapers and no credible explanation of how editors and senior executives allowed it to happen. They are getting what they deserve. On a broader front we have to be careful not to over-react and destroy what is valuable in terms of press freedom in this country. Don't forget that this scandal was exposed by others in the media, particularly The Guardian. Personally, I think the Press Complaints Commission has had its day but I do not want to see it replaced by draconian and restrictive statutory regulation: those are arguments for another day.

The most important outcome of this saga lies in the potential of our main political institutions to re-assert themselves as a force for the public good. We shouldn't get too excited about this or get it out of context. Politics has never been held in lower esteem so any opportunity for it to show it can hold people and organisations to account over a scandal that has truly shocked most people is to be welcomed. Nobody benefited from the relative weakness of politicians in the face of unrestrained media power, except a handful of media owners.

We should remember too that great press empires come and go whether they have the name Beaverbrook, Rothermere, Maxwell or Murdoch attached to them so the demise of the power of News International needs to be kept in context, although the suddenness and abruptness of this empire's waning is unprecedented.

More interesting is the opportunity that Parliament has been given to accelerate its own gradual rehabilitation from the dark days of the expenses scandal. This is to be welcomed. I hope they make the most of it because a Parliament held in contempt by the majority of people does nobody any good as disengagement from the political process hands the initiative to vested interests. Just because people are dismissive of Parliament and government doesn't stop them making laws, shaping our economic well-being, changing our relationships with other countries and committing us to wars, to highlight just a few. Broad engagement is crucial if these functions are to be carried out effectively, representing the majority of citizens and conducted in a manner that is genuinely accountable.

If - and it is still an if - MPs can conduct themselves through this crisis in a way that is seen as an effective expression of the anger most of us feel at the behavoir of Rebekah Brooks and her colleagues at the New of the World, holding those once powerful media interests and the police to account for their failures then politics will find itself in a better place.