When you’re told that what’s being offered is honest insurance, what do you think? Some will be reassured that all is bound to be well with the policies of an insurer like that. Which indeed it might be. If however you’re curious about what is meant by honest insurance, then read on.
An obvious starting point of course is the assumption we naturally have that all insurance should be honest. Dishonest insurance isn’t likely to draw in many customers, nor gain much regulatory approval. So there’s an element of stating the ‘blooming obvious’.
Yet there is certainly a public out there interested in hearing about honest insurance. An IPSOS-Mori survey from a few years ago identified honesty as one of the key ways in which customers of financial service firms judged the service they received. It was closely associated with ‘doing what they said they would do’.
So what might such consumer expect to receive from honest insurance? No doubt fair and transparent premiums, and the same for the settlement of any claims. Yet how can they be sure that that is what they’ll get? None of the firms putting honest insurance at the front of their branding provide any evidence that their firm really does do ‘what it says on the tin’. Is this lack of back up evidence acceptable?
Is ‘honesty insurance’ going the same way as references to a ‘competitive’ renewal premium? Many policyholders treat the latter with a pinch of salt, given how easily they can usually get the same cover for a lower premium, often from the same insurer.
This sort of language has moved onto the regulator’s radar. They’re using artificial intelligence to scan and assess the merits of assertions made in insurance communications and documentation. Add to that the prospect of voice analysis being used to weigh up the honesty of executive statements. The next few years will see a step change in the capacity of the regulator to address the merits of statements of honesty and competitiveness.
Another way in which ‘honest insurance’ is being used is in relation to fraud. It goes like this: if you use our software, you’ll get rid of all the fraudsters and be left with…. ‘honest insurance’. It’s a flawed argument. Getting rid of dishonest policyholders doesn’t turn what’s on offer into honest insurance. The honesty of any insurance is based upon the characteristics of that insurance – how the cover is designed and presented, how it’s priced and distributed, how claims are assessed and paid, and so on. It’s not based upon who you do not make it available to.
Some start up insurance firms are basing their upfront claim to honesty on their adoption of technologies that break with the old ways of doing insurance, breaking even with the need for humans at all. It’s bold, like any start up firm needs to be, but flawed, like start up firms shouldn’t be. There’s growing evidence that artificial intelligence is just as capable of producing unfair and discriminatory outcomes as humans, and often far less transparently so at that. Using big data and analytics confers little to no bragging rights about honesty.
I would love it if insurance firms could be more open and confident about the honesty embedded in their products and services. There’s one big and obvious caveat to that thought – they must have the evidence, and the track record, to back it up. So the next time you see honesty on the drawing board of a marketing campaign, ask yourself a few questions. What does the firm have to back that up? Are we sharing that with customers? Are we listening to their feedback about it?
Honest insurance, like trust, is as much judged by your customer as by your firm. Time to put a listening hat on.
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.