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7 March 2012
In a speech today, Director General at the Association of British Insurers (ABI), will call for innovation and forward thinking to keep a new generation of young savers engaged.
Otto Thoresen's speech at the NEST Forum today (7th March) comes as the UK's biggest employers prepare to automatically enrol up to 10 million people into workplace pension schemes in less than six months' time.
ABI consumer research has shown that auto-enrolment could be a significant opportunity for many to break their 'savings stalemate', with more than half (53%) of people not already in a company pension willing to remain 'opted-in' when the scheme is rolled out.* The additional 'free money' savers will receive from employer contributions was by far the biggest reason encouraging many to persist with saving under the auto-enrolment scheme.
And with the research also showing that 81% of people want to save more, Otto Thoresen will argue that the biggest challenge will not necessarily be convincing people on the need to save, but keeping them engaged in the saving process and persuading them it is worthwhile.
He will urge the industry to consider innovative ways to engage the new younger generation of savers that auto-enrolment will tap into, through ways that are easy and natural to them, such as social media and new technologies. He will also call for simple and consistent ways for people to track their savings journey.
Alongside this, Otto Thoresen will stress the importance of improving existing systems to help customers get more from their savings, pointing to the launch this week of an ABI code of conduct that will see the industry commit to measures to help savers shop around for the best annuity, which converts their pension into a retirement income.
Otto Thoresen said:
“Today we are talking about how to improve understanding among a new generation of savers. Young people are challenged by debt, from student loans, to the costs of setting up a home or getting a job, so we need to put ourselves in their shoes. The industry, NEST and the Government are geared up for the challenge of making it easier for this group to get involved in saving.
“This week we published our new code of conduct to ensure customers get the best deal for their annuity. It's time to work together to fix the current system of pension provision and lay the ground for a better one for the future. The introduction of auto-enrolment provides us with the perfect opportunity to do so.”
*Survey conducted by YouGov on behalf of the ABI between 7th and 10th December 2011 of 2,500 adults aged 18-70, weighted to obtain GB representative sample.
The ABI is the voice of the UK's insurance, investment and long-term savings industry. It has over 300 members, which together account for around 90% of premiums in the UK domestic market. The ABI's role is to:
· Be the voice of the UK insurance industry, leading debate and speaking up for insurers.
· Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.
· Advocate high standards of customer service within the industry and provide useful information to the public about insurance.
· Promote the benefits of insurance to the government, regulators, policy makers and the public.
The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 26% of the UK's net worth and contributing the fourth highest corporation tax of any sector. Employing over 290,000 people in the UK alone, the insurance industry is also one of this country's major exporters, with 28% of its net premium income coming from overseas business.
Insurance and businesses protect themselves against the everyday risks they face, enabling people to own their own homes, travel overseas, provide for a financially secure future and run businesses. Insurance underpins a healthy and prosperous society, enabling businesses and individuals to thrive, safe in the knowledge that problems can be handled and risks carefully managed. Every day, our members pay out £147 million in benefits to pensioners and long-term savers as well as £60 million in general insurance claims.