Insurers must improve, says MP

TOUGH-talking Labour MP John McFall has warned non-executive directors on the boards of giant insurance companies that he is watching them.

McFall, chairman of the Treasury Select Committee and scourge of the finance industry, told us: 'Consumers trust insurers less than they trust car dealers. When you buy a car, there is an after-care element. I want to see similar initiatives from insurers.'

He also sounded a warning over the escalating salaries of insurance bosses and said he would be looking at the independent non-executive directors who are supposed to keep an eye on them.

'Salary itself doesn't interest me,' he said. 'What angers me is when executive salaries are going in one direction and customers' interests are going in the other.'

And he warned that he would be holding non-executive directors - as well as their executive counterparts - to account.

McFall said he is stepping up the intensity of his inquisitions because 'these people are very powerful. They hold sway over many people's lives. I see my job as asking them the questions that my constituents would ask. I have no links with finance or the City.'

And if the executives find such questioning unpleasant, says McFall, all the more reason to probe.

'I'm not concerned about the profits companies make as long as the way they do business is fair to the consumer. It's a balance.'

McFall says many are not getting this balance right. 'Only if the industry accepts that it has a cultural problem and starts to put customers at the centre of its approach will it improve.'

Called before the committee last week were Prudential's Jonathan Bloomer, Norwich Union's Richard Harvey, Standard Life's Sandy Crombie, Royal & Sun-Alliance's Andy Haste and Legal & General's David Prosser.

'If I were writing their school reports,' said McFall, 'I'd say they could all do a lot better.'