Ethical awareness for claims people – pt3 – conformity

  • 11 February 2016

People have a tendency to think differently in a group than how they might do so when on their own. There are team-related dynamics at play in this, of which an important one is loyalty. Many of us like being part of a team and this is made use of in corporate circles by the way in which people are organised. But loyalty can be a double edged sword and claims directors need to be aware of its downside when it comes to how their people make decisions.

The flip side of loyalty in teams is a pressure to conform: in other words, to make decisions according to what other people are doing and saying, rather than weighing up the pros and cons of a situation for yourself. Some people refer to this as ‘groupthink’.

It is more likely to arise in teams that often make decisions in situations that aren’t always ‘black and white’. There are two sides to this: in such subjective situations, consistency is good, but at the same time, there’s a danger that one’s normal critical faculties might be overridden. There’s a famous case of a group of people being asked to judge the length of some lines, which on their own was a simple task, but when done in association with another group of people (primed to give wrong answers), that original group of people struggled to give the right answer and many gave a wrong answer. Conformity ruled.

Where a team is closely managed, for example through compliance controls and audit checks (and claims teams often are in such situations), the pressure to conform is increased. And if you add in campaigns to tackle insurance fraudsters (around which terms such as ‘fight’ and ‘attack’ are common), then that group defensiveness gets even stronger.

It was for these reasons that some months ago, I forecast that it will in claims that the Financial Conduct Authority’s new whistleblowing regulations could first impact the insurance sector. Those pressures to confirm can stifle contrary (and perhaps correct) assessments of this or that pattern of claims behaviour and if the corporate culture is strong on loyalty (for which read confirmity), then the chances of whistleblowers will increase, and the chances of whistleblowing retaliation heightens.

So how might an insurer lean their claims teams in a more favourable direction? Here are three suggestions:

  • encourage debate about the ‘right and wrongs’ of certain claims situations, making sure that a real diversity of views is encouraged. Consider bringing in a ‘critical friend’ to facilitate this;
  • encourage learning loops to help capture variations in claims that need to be recognised within team protocols. In other words, build some flexibility into how your people work;
  • ensure that your supervisors and managers are well trained in how to handle an approach by a whistleblower, and ensure that robust procedures are in place to protect a whistleblower from any form of retaliation.