Sam Woods, Deputy Governor, Prudential Regulation and Chief Executive Officer of PRA delivered a speech entitled ‘Looking out for the policyholder’ at the ABI’s annual conference. The speech focused on the policyholder, competition and competitiveness and Solvency 2 reform.
With regard to PRA’s secondary objective to facilitate effective competition, Mr Woods provided practical examples of steps PRA has taken to support this but explained that, in his view, competition should not be a primary objective for PRA.
Mr Woods commented that there is no evidence that the introduction of Solvency 2 has crushed the profitability or growth of insurance companies nor is there any convincing evidence that Solvency 2 has increased prices for UK insurance policyholders.
PRA intends to launch a sub-committee of its Practitioner Panel. Mr Woods concluded that it is important that PRA gets insurance regulation right and at this point in time that means:
- In light of the Treasury Select Committee’s review of aspects of Solvency 2 that are not working well, PRA is taking steps to address those issues; and
- PRA needs to maintain high standards of safety and soundness of UK insurers to ensure an appropriate degree of policyholder protection.