Legal & General Group (L&G) has decided to withdraw its membership from the Association of British Insurers (ABI) by the end of 2014, claiming that a large part of its business falls beyond the trade body’s remit.
The decision is being seen a major blow to the trade body at a time of rapid regulatory changes in the UK financial services sector.
The move comes after changes in the mandate of the ABI due to the merger of its investment affairs division with the Investment Management Association earlier this year.
Legal & General chief executive Nigel Wilson said: "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."
The ABI plans to concentrate on the general insurance sector, while Legal & General has only limited business.
The decision by the Britain’s third-largest insurer by market capitalization highlights the weakening influence of the ABI for insurers; although, it has approximately 300 members, accounting for 90% of the UK insurance market.
Commenting on the L&G’s decision to quit the trade body, ABI, director general Otto Thoresen said: "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."
London-headquartered insurer L&G offers life insurance, general insurance, pensions and investments products.
Image: British insurer Legal & General to sign multibillion US pension insurance deals. Photo: courtesy of scottchan/ FreDdigital Photos.net.