It has certainly been a day of competing attractions at Westminster. The scurrying back and forth through the corridors of the Palace of Westminster and the conspiratorial knots of MPs in almost every corner suggested something was going on as I arrived there this morning. Indeed, it was. The Speaker, the hapless Michael Martin, had just announced his resignation in a month's time.
There was the debate on Equitable Life about to take place in Westminster Hall, which doesn't seem to have moved things forward but we'll have a look at the full transcript of that one in the morning. But I was there for the meeting of the All Party Parliamentary Group on Insurance & Financial Services to discuss the rumblings of discontent around the trade credit insurance market. It was an interesting line-up with the British Retail Consortium expressing the concerns from the coalface, the British Insurance Brokers' Association telling it from the broker/insurer interface and the Association of British Insurers speaking for the underwriters who end up paying the claims.
There was really very little disagreement among them and a strong consensus that the £5bn top up scheme announced by the government in the Budget would not make alot of difference. The BRC dismissed it as "too little, too late", describing the 1 April 2009 start date as being so far after the worst of the crisis was over as to be of little real value to retailers and their suppliers. The BRC would like to see it back-dated to 1 April 2008, although it is hard to see how this could work as a back-dating that far would surely only appeal to those business that knew they had bad debts that would give rise to claims that they hadn't got cover for. There might be scope for rolling it back a few months to cover potential claims that could arise, say, when the common 120 days of credit expire but even then you are coming close to insuring a certainty. You can't help feeling some sympathy for the BRC though as it is clear this scheme was needed some months back as crisis started to grip the high street.
That sympathy was only enhanced by learning from the ABI that it had first been asked by government to discuss the top-up scheme last November but was sworn to secrecy. If only the government had moved faster then and got something in place before the end of the year it might have done some real good.
There did seem to be a sense of relief all round that the government had not been tempted down the same road as the French government with its scheme for offering 100% where it had been withdrawn (as opposed to the UK scheme which is a maximum 50% top just when cover has been reduced and then only for six months): "We are not asking for a scheme that second guesses the market", said the BRC's Jane Milne, showing the sort of understanding for the insurers' position that you would expect from someone who used to work for the ABI.
The ABI took the opportunity to take a swipe at pre-pack administrations which it claimed "often leave the unsecured creditors and insurers completely exposed while the 'phoenix' company rises from the ashes and goes off with all the viable continuing business". The ABI's spokesman, its head of general insurance, Nick Startling, stopped short of calling for an end to pre-packed administrations when pressed by some of the group members but urged greater transparency and notification. I did detect some support for this criticism on the Tory side.
All-in-all it appears that the trade credit insurance market doesn't have alot to fear on the political front at the moment if this degree of calm consensus can be maintained.
With great sadness we confirm that Sir David Rowland, our former Chairman from 1993 to 1997, has passed away. He played a critical role in safeguarding the future of the Lloyd’s market through perhaps its most difficult period.— Lloyd's (@LloydsofLondon) February 18, 2019
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