Ethical Awareness for Claims People – pt4 – Fading

  • 25 February 2016

Hindsight is a complex thing when it comes to ethics. You may look back at something you’ve done and have regrets about it, asking yourself: “what did I think I was doing?” However, there are also people who try to dismiss a questionable action, or perhaps stop seeing the question hanging over what they’ve done, and the process they’re going through is referred to as ethical fading.

Ethical fading is something that claims people have to guard against, working as they do in situations that require frequent judgement calls, sometimes in adversarial situations.  In such circumstances, it can happen that we start to make decisions that we think fall within the scope of what is ethical, but which are in fact progressively straying into unethical territory.

Two factors can be at play here. We may start to disengage our values from a situation in which business interests are at stake, because we find it too uncomfortable to maintain a balance between the cognitive and emotional processes that underlie decisions. In other words, it can sometimes seem easier to focus on financial numbers than on corporate values.

And secondly, after having made a less than ethical decision, we may resort to rationalising away that problem, by trying to make a bad decision look more like a good one. What we’re trying to do here is reduce the conflict between our view of ourselves as ethical people and the unethical decision we’ve taken. Which of us hasn’t heard at some point in our careers that most common of rationalisations: “well, everyone else is doing it.”

For claims people, working as they often do in an environment with many rules and processes, taking one small ‘unethical step’ may seem of little consequence, easily justified by the pressure of targets and the fight against fraudsters. All those rules and processes seem to almost give you permission to switch off the ethical, values driven part of your thinking. Add in several layers of protocols from your claims supply chain and ‘ethical fading’ becomes even more likely.

And if this enters your firm’s corporate culture, it can easily take over: doing it once makes it easier to do it again, and again. And if she did it, then so can I. If your firm gets into this state, then getting them back on an ethical course takes time and effort. It’s no use getting a senior executive to give a stirring speech on how important ‘doing the right thing’ is. If the claims people return to their desks and the same rules and processes, they just won’t see how to do things differently.

One way to start moving your claims team out of such a bind is to build some measured flexibility into your rules and processes, and to take steps to encourage discussion and debate about what ‘doing the right thing’ looks like in such and such a situation. In other words, give ‘permission’ to your claims people to apply their values to their work, and talk them through the practicalities of doing so. I’m seeing some UK insurers experimenting in this way and it would be great if, in due course, we heard from them on how well that’s turned out.