Legal & General is set to relinquish its membership of the Association of British Insurers (ABI) at the end of the year in a shock move, saying much of its business now falls outside of the trade body’s remit.
In a letter to ABI director general Otto Thoresen, L&G's chief executive Nigel Wilson (pictured), said: ‘Following the recent change in the constitution and mandate of the ABI as a result of the transfer of investment business to the IMA, we have given considerable thought to the question of our continuing membership.
‘This is a reflection of the fact that a large proportion of our business lines will fall outside of the remit of the ABI given that the business of Legal & General has significantly evolved and in 2014 our business is now as much investment management as insurance.
‘There is also a recognition that even within the insurance sector the ABI often concentrates, for understandable reasons, on the general insurance sector where as you are aware we have only limited business lines.’
Wilson said that its public policy work, which involves it sharing commercial aspects of its business with government, also made it difficult to work with ABI members on such issues, citing Competition Law.
‘We believe that increasingly engagement with government, regulators, quangos and other external bodies will be on a case by case basis going forward and will have to be more individually tailored to individual company situations as business models of sector participants become more diverse and less suited to uniform representation through one trade body,’ Wilson added.
Wilson confirmed he will now step down from the ABI board as a result of the move and commended the work carried out by the organisation, adding it was ‘much sadness’ that L&G is to part ways.
Thoresen said he is disappointed by the news, but stressed that the ABI still represents the vast majority of the insurance industry.
'As a trade association, of course we are disappointed by the resignation of a member, however the ABI’s continuing strong membership represents over 90% of the insurance sector. The great advantage of the ABI is that our members work together across the usual corporate boundaries to tackle issues that are important to consumers and to deliver an agenda for reform,' Thoresen said.
'Working with our members we will continue to drive the reform agenda forward to make markets work better for customers on policy areas as diverse as pensions, use of data, welfare policy, tax and regulation to ensure the UK insurance sector continues to contribute positively to the economy and society.'
Although the loss of Wilson from the ABI board is a blow, it still includes such influential individuals as RSA chief executive Stephen Hester and Direct Line boss Paul Geddes.