Better lobbying leads to government action

The insurance industry seems to be having a good run with government.

I have little doubt that some of the recent encouraging signs have much to do with the huge rise in the cost of insurance over the last couple of years, which has forced the availability/affordability argument to the forefront.

Stephen Byers recently lashed out at the perceived effects of the compensation culture in no uncertain terms and this was followed up by the Education Secretary, Charles Clarke, speaking at one of the teachers' union conferences over Easter. If fear of being sued pushes us any further towards a risk-averse society, it seems clear that the government will step in with some further reforms to the civil justice system designed to deter excessive or speculative claims.

Rehabilitation is a subject that the insurance industry has been trying to engage government on for several years. Now it looks to be making serious progress.

The Department for Work and Pensions has issued a draft proposal on vocational rehabilitation, which is a start. Again, this was driven by concerns over pricing and availability and springs from the DWP's review of difficulties in the employers' liability market.

For years, the Association of British Insurers has been lobbying to have insurance fraud made a specific criminal offence - last month this came a significant step closer.

The Home Office wants to tighten up on financial fraud and, while stopping short of creating a specific offence of insurance fraud, has produced a set of proposals that go further than anyone in the industry could have hoped.

While difficult to pin down the reason for the government's change of heart, better lobbying, with major insurers adding their weight to the ABI's better co-ordinated efforts, clearly plays a role. Ministers have stopped seeing the insurance industry as a regulatory problem and started to look at what it does and the way it does it, thus, it appears to be getting a fair hearing.

We have certainly come a long way since Helen Liddell's post-election agenda in 1997 to 'name and shame' major firms for their part in the pensions mis-selling scandal.