Ten things that have gone badly wrong in the British insurance industry

UK insurers have been under fire since George Osborne’s Budget, and many must be reeling from the shock of it all.  Suddenly the landscape seems to have changed.  No longer will people be forced to buy annuities, and suddenly people have a lot more options. As an observer who has for so long campaigned on behalf of customers, it has been heartening to witness such regulatory action at long last, yet nevertheless astonishing to see how long it has taken for meaningful intervention from the Regulator on behalf of customers.  The time for change has arrived. Here are ten things that have gone wrong in the UK insurance sector.

1. Failure to understand end-customers and flawed profit models:  It seems to me there are two fundamental issues.  Firstly, insurance companies have failed to recognise who their customers are and secondly, their profit models are flawed as they rely on consumer inertia and high initial selling costs being recouped over many years with often unfair charges.