There are many ethical dilemmas in insurance. And what’s more, they often make people angry, and suspicious and fearful, and many other things besides. Yet that emotional side is often overlooked. Being good at ethical dilemmas can often hinge on how those emotions are handled.
Remember that being good at ethical dilemmas is important. Handle them well and people notice, altering their behaviour to more accord with what is expected. And people feel reassured that the difficult situation has been recognised, addressed and resolved.
Compare that with handling them badly: the situation is left partial addressed or not at all, with people noticing that the firm doesn’t really care. Bad habits are perpetuated and may even escalate into someone blowing the whistle, either within the firm or to the regulator.
Researchers have found that ethical dilemmas are likely to elicit more emotion than other types of decisions. This happens on two levels. Firstly, at the level of the situation itself: they’re often unique and based around interpersonal relationships. The people involved in them feel exposed, with their judgement being scrutinised and perhaps even their professional identities questioned. All this increases their emotional element.
The second level involves the person confronted with the ethical dilemma and being asked to resolve it. The situation can cause them to worry and become anxiety, for reasons to do with both past experiences and future expectations. This in turn will influence their ability to reach a good decision.
So how can we manage that emotional side to ethical dilemmas in insurance? The first step is to prepare people for handling them. Good training gives people background knowledge and an array of skills, as well as plenty of case studies to practice on. That familiarity builds confidence, which reduces worry and anxiety.
Step two is to show people how to acquire the necessary space and time to reach a considered decision. That space and time helps reduce the stress inherent in the dilemma itself, as well as helps the person handling it reach a good decision. Several of the skills used in training on ethical dilemmas are designed with the dual purpose of both generating and making use of that extra space and time.
And the third step is to remember that reaching a decision on the ethical dilemma in front of you is just the beginning of the end, not the end itself. You still have to communicate it to people so that they learn what they need to learn. You still have to give support to people affected by it, so they feel less exposed. Remember that ethical dilemmas often involve good people making poor decisions, hence support rather than punishment. All of this and more involves a strong emotional element.
You may at times feel tempted to follow your intuition when addressing an ethical dilemma and go for a quick, decisive judgement. Resist that temptation where ever possible. Research points to good, ethical decision making being more considered and deliberate. Most importantly, it is considered and deliberate in its weighing up of all factors: both the facts and the emotions.
Let’s end with a regulatory perspective. The Senior Managers and Certification Regime positions ethical culture at the heart of how a firm should conduct its business. And the regulator will look for evidence of that ethical culture in the capabilities of senior managers. Being good at ethical dilemmas will be part of that evidence base. And being good at ethical dilemmas in insurance means recognising their emotional dimension, and using it to resolve difficult situations.
Duncan is the founder of the Ethics and Insurance blog and the author of its many posts. He's a Chartered Insurance Practitioner, having worked 18 years in the UK market. As an adviser to many firms on ethics issues, as well as a regular conference speaker, he is one of the leading voices on ethics and insurance.