These posts are all about the ethics of insurance claims. It's a big subject and you'll find posts that provide you with guidance, insight and challenge.
5 sources of bias in analytics that insurers must address
Insurers understand bias in data, but need to be on top of bias in analytics as well. Organising their response around these five sources will make help a lot.
The Big Ethical Challenge for Insurers in 2021
The big ethical challenge for insurers in 2021 will be to learn the lessons from events in 2020 and to apply them systematically across the firm. It will be a bigger task than many insurers think, but those who get it right will reap reputational rewards.
Data Ethics starts with Rigorous and Critical Due Diligence
Low consumer trust will hamper insurers' digital strategies and fuel regulatory interventions. A more critical culture and more rigorous data due diligence is needed.
Data and Power pt2 – the two big threats to insurers’ digital strategies
Insurers are going to find that discrimination and access represent the two biggest challenges to their digital strategies. How insurers engage with these issues is critical
Why insurers need to review their use of credit data
As a leading US insurer announces that it will remove credit scores from its pricing by 2025, there’s plenty of evidence that UK insurers need to be subject their use of credit data to serious review.
The lessons that claims people should learn from the exam grades debacle
The recent exam grades debacle in the UK provides insurance people with lessons on what will befall them if current trends in claims practices continue.
The big questions about vulnerability that your firm needs to address
The regulator’s new guidance on vulnerability presents insurers with some serious questions to address. Understanding the ethical context from which they emerge will help your firm really get to grip with the issues.
Insurers must prepare for big changes around genetic testing
We will soon see some big changes to the way in which the use of genetic information by UK insurers is regulated. It will be a different world, and insurers need to start preparing for it now.
Are loss prevention initiatives just trojan horses for data harvesting ?
A buzz phrase in the insurance market at the moment is ‘ecospheres of prevention’. It sounds like exciting stuff, but it is also replete with questions of ethics and power.
Behavioural fairness is a serious risk to the future of insurance
An influential narrative has emerged within insurance in recent years, centred upon the notion of behavioural fairness. It's a narrative that could determine how insurance evolves over the next decade. The problem is that it's a narrative with significant flaws.
Some thoughts on ethics, insurance and the pandemic
It is in times like the present that the reputation of the insurance sector will be defined. Here are some thoughts on ethics, insurance and the current pandemic.
Telematics will be much more influential than people think
Telematics features regularly now in the business and technology media. And academic institutions are having their say too. Yet all too often, the influence that telematics is having is underestimated.
The ethical storm clouds hanging over insurance claims practices
The biggest ethical exposure facing insurers over the next 24 months will come from claims practices. It deserves to be one of the big financial risks that insurers typically detail in their annual report. So why are ethical storm clouds hanging over claims?
The three lines of defence model is not working for insurers
Why are so many ethical challenges being faced by insurers at the moment? Has the three lines of defence model failed? If so, what can insurers do to make it work?
Why discrimination is an enormous ethical challenge for insurance
Insurers are facing a challenge to how they have been managing discrimination across their business. They should treat it seriously, for it has powerful backing and could have serious repercussions.
The big ethical challenges facing insurers in 2020
2020 will be an eventful year for insurers. During the many years I’ve been tracking the ethical challenges facing insurers, never before have I seen so many issues demanding attention. Some firms will find the learning curve steep and challenging.
Why privacy solutions can come with ethical complications
Privacy enhancing analytics like homomorphic encryption seem to offer much to insurers, yet they also have wider implications that firms need to consider as part of their wider focus on data ethics.
Why TCF is the wrong path for implementing data ethics
Data ethics is now a regulatory priority for the FCA. And the TCF framework is being positioned as the means for delivering it. That would be a mistake, for these five reasons
The ethics of loss adjusting firms – why so much secrecy?
Why are so many loss adjusting firms being secretive about their codes of ethics? Few put them in the public domain, but keeping them under wraps doesn't help build trust in their work.
The Fundamental Challenges that Insurance faces from Data Analytics
What are the fundamental challenges that data and analytics pose to insurance? Here are six that I think raise profound questions for the sector.
Conflicts of Interest – the vital step from recognising to reporting
Conflicts of interest are a feature of most insurance markets. And a vital step in managing them is helping people move from recognising to reporting them. Yet that isn’t as easy as most might think.
Why Honesty and Purpose will change the Conduct Agenda
What is an insurer there for? It's a question that every insurer, new and old, needs to understand and address with honesty, for it drives how a business is run.
Why the FCA should not use claims complaints as a value measure
The FCA wants to use claims complaints as one of its values measures. It makes sense, until you remember the direction that claims systems are going. It is likely to have serious consequences for policyholders.
Will the ‘best interests of the customer’ sink some sector business models?
Is the oft heard call from within the sector to be more customer centric about to be put to the test? Some sector business models will struggle to pass, and change could be painful.
Why predictive analytics in claims is so dangerous for insurers
Claims settlements are an insurer's biggest expense. So analysing them in all sorts of clever ways is surely a good thing. Yet is it? Some of the uses to which analytics are being put in claims fail basic ethical tests, and risk confirming the public's worst fears about the sector.
Is underwriting at claim stage a reputational timebomb?
A pattern is emerging across the market that points to a new type of underwriting. And it is pretty revolutionary, as well as controversial. It is being referred to as ‘underwriting at claim stage’.
How good are your firm’s algorithms? Can you prove it?
There's a lot of excited claims being made about algorithms in insurance. Can they credible? Can they be trusted? It's time to remove the hype and focus on performance.
Why credit data must feature in your plans for 2019
Insurers need to make sure that their plans for 2019 include a review of how their underwriting and claims people are using credit data. Here's why.
What lessons can insurance people learn from the Liberty Mutual fine?
The £5.28m fine handed out by the UK regulator to Liberty Mutual last week fired two warning shots across the bows of the insurance sector. This week's blog post examines their repercussions for insurers.
Why conflicts of interest is the top ethical issue for claims in 2019
Every claims director in every insurer should be looking to include an assessment of conflicts of interest in their plans for 2019. It's going to be their number one ethical risk. Here's why...
How can insurers get people to open and read their code of ethics?
How do you make sure people are opening and reading your code of ethics? My review found that insurers were missing out on some significant opportunities.
An important lesson for insurers to learn about their codes of ethics
Codes of ethics tell people about a firm's ethical commitments. I’ve completed a detailed review into how insurers do this. The first finding was a surprise!
Where the really fundamental changes in insurance will emerge
How transformative are the changes happening in insurance at the moment? In amongst the noise of disrupting start ups, is a paradigm shift under way?
Why ethics initiatives can lose momentum, and how to fix it
Ethics initiatives often launch with a flurry of activity, but then lose momentum as they progress. Why does this happen, and what can you do about it?
Are actuaries ready for a new era of accountability in insurance?
Actuaries are approaching an ethical crossroads, where the opportunities of data and analytics will meet a new era of accountability in insurance. How they respond will set the scene for how trust in insurance develops over the next five years.
A checklist for conflicts of interest in insurance firms
Are conflicts of interest in insurance being taken seriously enough? It’s a question that needs to be addressed, given recent headlines. So what should insurance firms check for when it comes to being better at conflicts of interest? Here are nine suggestions.
7 reasons why claims optimisation needs to be seen as a failure
The most ‘ethically questionable’ practice to have emerged out of the innovation currently transforming insurance is ‘claims optimisation’. As key pieces of accountability and data legislation go live in 2018, what should claims directors weigh up in relation to this controversial practice?
The drive to build trust in insurance must start here
We need to think differently about trust in insurance. Digitisation makes this more important, not less. Firms need to organise their thinking, and not just leave trust to chance. If there’s a new ‘trust story’ to be told, it’s insurers who need to write it, before someone else does in their place.
Personalisation – could it take insurance into a digital winter?
Insurance is being transformed not by data or analytics, but by personalisation. Yet personalisation has some inherent flaws, which I examine in this post. What we could end up with is a cauldron of disruption, fuelled not by innovation, but mistrust.
Gender bias in artificial intelligence: a vital trust issue for Insurers
Researchers have found clear evidence of gender bias in artificial intelligence. The growing use of AI by insurers means that the sector needs to address this quickly, in order to maintain public trust and avoid regulatory scrutiny.
Should insurers share claims data to make their systems more accurate?
Insurers want to share claims data in order to improve the accuracy of their new analytics systems. It sounds quite straightforward, but lift the lid and it’s a proposition with several ethical implications.
Privacy in Insurance: 3 sources of ethical risk for insurers
Privacy in insurance has been getting lots of attention recently, largely because of the EU’s GDPR. Yet there’s a danger that this surge in legal and compliance activity will overly focus minds on the policy and process detail, while leaving scant time to think through the big privacy issues that the insurance buying public is concerned about.
20 Changes that Influence the Ethics of Insurance Claims
Insurance is changing in ways that have implications for the ethics of insurance claims. Here are 20 such changes that claims people need to watch.
Four challenges that insurers face when using artificial intelligence in claims
The use of artificial intelligence in claims represents a 'significant opportunity’ for the sector, said Ageas. It also introduces some slippery slopes, four of which I explore here.
Could this be the Achilles Heel of Insurance Fraud?
Telling claimants that you’re collecting data to combat fraud, and then using it to optimise claims settlements, could turn out to be the Achilles Heel of insurance fraud.
Is this the most controversial claims innovation of all?
With claims optimisation, are insurers abandoning all remaining hope of sustaining trust in a digitised market? It is innovative, but hardly ethical.
Does this claims practice represent an open door into a dark room?
At the heart of the training I deliver on conflicts of interest is this: a conflict of interest is a[...]
Weighing up the fairness of your claims service – pt2
In last Friday’s post, I outlined four dimensions of fairness that were relevant to delivering a service like insurance claims,[...]
How to weigh up the fairness of your claims service – pt1
Fairness is a complex thing. Insurance people often have a tendency to latch on to one way of looking at[...]
Ethical Awareness for Claims People – pt4 – Fading
Hindsight is a complex thing when it comes to ethics. You may look back at something you’ve done and have[...]
Is motor insurance becoming a magnet for enforced disruption?
The market for personal motor insurance is described by those on both the inside and outside as dysfunctional. It has[...]
Ethical awareness for claims people – pt3 – conformity
People have a tendency to think differently in a group than how they might do so when on their own.[...]
Ethical Awareness for Claims People – Part 2 – Attributing
At the heart of the role that claims people have lies the weighing up of a range of factors that[...]
Ethical Awareness for Claims People – pt1 – Framing
This is the first of a four part series of posts looking at ethical awareness for claims people. In each[...]
The top posts on the ‘Ethics and Insurance’ blog – 2015
What have been the most popular posts on the ‘Ethics and Insurance’ blog? Here is a quick look at the[...]
Why corporate social responsibility is failing to build trust in UK insurers
Two thirds of people will repeatedly buy from companies that are socially responsible. So said a leading figure in the[...]
Pre-approved insurance – what are the implications?
How might consumers react to recent signs of insurance being offered on a pre-approved basis? Is there a sense that[...]
What lessons should insurers learn from the VW scandal?
The scandal currently engulfing the car maker Volkswagen will undoubtedly feature in many an ethics course for years to come,[...]
A revealing window into insurer thinking on big data
A recent conference on 'big data and insurance' opened a window into the UK insurance sector's current thinking on what[...]
Why story telling is vital to delivering the new conduct standards
The first of the new conduct standards for insurers being introduced by the UK regulator from March next year is[...]
How ethical is it for firms to demand payments from a supplier?
Earlier this year, a survey by the Federation of Small Businesses found that 5% of businesses had been asked by[...]
How to start getting results from ethical due diligence
The UK insurance sector has been told in no uncertain terms that it isn’t doing enough ethical due diligence. The[...]
Why that magic element of big data could be fatal for insurers
Earlier this year, I wrote a post called ‘Data, Equality and Insurance’, about a small survey that I’d undertaken into[...]
Reporting damage not being claiming for – is it really worth the loss of trust?
Should policyholders be obliged to report incidents to their insurer, even if they’re not claiming for them? And how fair[...]
Big data: has the Financial Ombudsman missed something significant?
The Financial Ombudsman Service (FOS) has been weighing up the implications that big data will have for its work. And the[...]
Ethics and Loss Adjusting pt3 – negotiating on a slippery slope
Loss adjusting firms sit in the middle of complex supply chains, surrounded by insurers, brokers, contractors and the like. Appointments[...]
Ethics and Loss Adjusting pt2 – the Fairness of Settlement
There’s one question that every policyholder has in mind when discussing their claim with a loss adjuster. It’s a question[...]
Ethics and Loss Adjusting: Pt1 – That Perennial Thorn
Loss adjusters have long had to address questions about the conflicts of interest their work puts them in. One hears[...]
Ethical nudges and their role in tackling insurance fraud
It's common now when taking out an insurance policy or reporting a claim, to be greeted with a warning about[...]
Proportionality and the Ethics of Private Investigations – Pt 2
Insurers’ use of private investigators has been criticised for being “aggressive and inappropriate”. In response, their trade body, the Association[...]
Private Investigators : 2 ethical issues that need extra attention from ABI members
Insurers in the UK now have new guidelines on the instruction and use of private investigators. While the guidelines have[...]
Social Sorting: could it be the stuff of nightmares for insurance firms?
Privacy is an ethical issue that the UK insurance sector often thinks about, usually in terms of it being something[...]
Conflicts of interest: a challenge for more than just insurance brokers
Conflicts of interest have been in the ‘insurance news’ a lot recently, chiefly because of the UK regulator’s review of[...]
Why data is the key regulatory challenge in financial services
Data is the key challenge facing the regulation of UK financial services. So said a representative of the Prudential Regulatory[...]
The 3 most popular issues on the Ethics and Insurance blog
This is the 200th post on the ethics and insurance blog, so if you don’t mind, I’ll take a quick[...]
Disclosure: something that’s inevitable for insurers and brokers?
Transparency is an integral part of how trust is established and sustained. Being open with someone about something that’s relevant[...]
Are independent ethics committees valuable or window dressing?
What makes an ‘independent ethics committees’ work? Can they act as an effective counterbalance to business ventures that operate close[...]
11 principles for building ethics into your use of big data
In last week’s post, I explained why insurance firms need to integrate privacy protection into the big data dimension to[...]
How to manage your conflicts of interest much more effectively pt2
In an earlier post, I looked at the first of two problems I often encounter when reviewing how insurance firms[...]
A critical step for everyone investigating insurance fraud
How's this for a proposal? It should be mandatory for everyone involved in the investigation of insurance fraud to pass[...]
Warnings from South Korea: the impact privacy can have on insurance
Back in 2012, I singled out privacy as the number one ethical issue that will confront the insurance sector over[...]
Who is the fairest of them all? How to use fairness to weigh up choices. pt2
If, as the UK regulator emphasised recently, fairness is to be the dominant theme of 21st century financial services, how[...]
Two simple tests for deciding on the fairness of your decision. pt1
‘Fairness’ crops up a lot in insurance regulation – the chief executive of the UK regulator said recently that the[...]
3 big ethical questions that motor claims directors need to answer
3 ‘distinctly ethical’ questions stand out from the provisional findings of the Competition Commission’s investigation into the UK private motor insurance.
Conflicts of interest – are you ready for 2014? It’ll be busy!
Conflicts of interest look to be the big ethical risk for insurance firms in 2014. How are your firm's being handled? Here are 8 steps to get you started.
Three warning signs that a firm is struggling with its ethical ‘tone from the top’
Delivering an ethical 'tone from the top' can be a challenge at times for some business leaders. So what are some warning signs to look out for?
Insurance, data and a politician – a cautionary tale about privacy
How one insurance organisation got into hot water when it released claimant data that it thought had been suitably anonymised.
Ethics training: rounding off 2013 and planning for 2014
People working in the UK insurance sector are wanting more training on ethics and the ethical issues that matter most to their work. How can firms respond?
Has the investigation of insurance fraud suffered from too much ‘group think’?
UK insurers are failing to exercise proper control over their investigation of insurance fraud. Could too much 'group think' have been responsible?
A revealing window into the ethical culture of UK loss adjusters
If there’s a ‘stigma’ attached to a loss adjuster working for the policyholder, what does that say about the ethical culture of loss adjusting firms?
Insurance and Innovation – Part 2 – why ethics is a vital ingredient
If a firm's corporate culture doesn't emphasise the importance of ethical behaviours, then their capacity for innovation will be diminished. Here's why.
Ethics, Insurance and innovation – Part 1 – why change seems inevitable
With insurers under a lot of pressure to reform their claims operations, could the ethical culture at a firm contribute towards its capacity for innovation?
Why underwriters need to use predictive analytics with care
What are the ethical implications of insurers using predictive analytics for underwriting purposes? There's a clear line that underwriters should not cross.
One vital rule for insurers to remember about predictive analytics
Predictive analytics offers many benefits for insurers, but there is one vital rule that must never be forgotten, especially with regard to potentially fraudulent claims
An Inconvenient Truth coming out of FCA Thematic Reviews
Is the FCA's use of thematic reviews taking control of the setting of best practice standards within the insurance and financial planning sectors? And if so, should those sectors accept this?
Ethics and Claims – 5 big issues Insurers should Focus on
Claims departments are under pressure to reform how they work. Here's why they need to stand back, see the bigger picture and reflect upon why they do what they do.
How watertight is the Flood Insurance agreement for consumers?
The new agreement on flood insurance in the UK is a step in the right direction, but it does raise several questions as to its fairness.
It’s good to talk – using ethical dilemmas as part of your training programme
Encouraging staff to talk about their firm’s values is one big gain from using ethical dilemmas in training, but there are other gains of much wider impact for the business.
The new uncertainties that anonymised data will introduce
How insurers use anonymised data has clear ethical implications, as well as risks that could trap the unwary and lead markets astray.
Ethics and insurance claims – part 5 – the pivotal role of ethical culture
Part 5 in my series about ethics and insurance claims. Ethical culture is at the heart of how staff engage with claimants and determines the conclusions about fairness and trust that claimants are left with.
Ethics and Insurance Claims – Part 4 – the balancing act that is Privacy
Balancing openness and privacy can be a delicate task for claims departments, but it’s a crucial one that benefits us all, as individuals and businesses.
Ethics and Insurance Claims – Part 3 – addressing conflicts of interest
For the insurance sector, being in a conflict of interest is like having the flu – there’s nothing unethical about it; it’s just something that happens to us all. So the ethical question to be addressed is not how you avoid conflicts of interest, but how you recognise and respond to them.
Ethics and Insurance Claims – Part 2 – Getting Compensatory Justice Right
Insurance is an important part of how compensatory justice is delivered, but there are big ethical implications if this is not done efficiently and fairly.
Ethics and Insurance Claims – Part 1 – Information Asymmetry (2 of 2)
In the second post about ethics, claims and information asymmetry, I’ll look at some examples and outline how insurers can take some first steps to managing it.
Ethics and Insurance Claims – Part 1 – Information Asymmetry (1/2)
This is the first in a series of posts about the ethical issues associated with insurance claims. I’m going to start off with what is probably the most significant of all such ethical issues, information asymmetry.
The key ethical issues associated with insurance claims
Insurance claims are pivotal experiences in the relationship between the insurer and the policyholder. In a series of posts, I'll be exploring the key ethical issues associated with insurance claims, starting this week with information asymmetry.
Some Thoughts on the FCA’s Thematic Review of Personal Lines Claims
News that the FCA is considering a major review of how personal lines claimants are being treated could have all sorts of ethical repercussions.
Windows are opening into the Ethical Culture of Insurance Claims
Could insurers' reactions to a recent survey of policyholders' experience of personal lines claims services open a window into their ethical culture?
Getting serious about assessing your firm’s ethical risks
A structured approach to assessing ethical risk that recognises market, firm and employee driven issues will help you focus more on underlying causes.
Ethical culture and the mindset of claims handlers: definitely one to watch
The mindset of claims handlers can speak volumes about the ethical culture of their firm. And the ear of the FCA is starting to tune in. Here's why.
12 questions an insurer needs to ask about their use of private investigators
The FSA is reviewing how well insurers have been managing private investigators. Here's a quick checklist to help insurers do a quick assessment of where they stand.
Are there ethical lessons that adjusters can learn from auditors?
How auditors have been grappling with ethical issues like conflicts of interest could be a learning experience for loss adjusters.
6 places a claims manager should look for ethical risks
You're a claims manager tasked to 'do something on ethics in 2013'. So where do you start looking for ethical risks associated with how your people work?
How insurance history could have been different if ethics had been measured
Four examples of how insurance history might have been different if ethics had been measured. Time now for your firm to adopt some?
Ethical Dilemmas – challenging, interesting, important
It may be tempting to ‘learn as you go’ when next faced with an ethical dilemma to resolve. Here are three reasons why some preparation is worthwhile.
Privacy and Consent: some examples for a proactive insurer
Insurers need to challenge engrained thinking about consent to reflect the new regulatory and reputational landscape. Here are some examples for a proactive insurer to get started with.
Privacy, identification and the need to know: who decides?
As many firms accumulate data about us to build a competitive advantage, the question of their right to know versus our right to privacy comes to the fore.
Privacy and Identification – pt4 – we all like to put our best side forward
Identification is one of the key privacy issues that insurers need to attend to. It is however perhaps the most difficult one for them to get right. Here's why.
Privacy and Surveillance – pt3 – insurers need some mutual self insurance
How well have insurers been managing the balance between the privacy concerns that surveillance can give rise to and the need to effective counter fraud measures? And what's in it for the insurance sector for doing so?
Privacy and Secondary Use pt2: referral fees and slippery slopes
Secondary use has been a problematic ethical issue for insurers, causing the motor market to be labelled as dysfunctional. It creates a tension for insurers that needs to be resolved in order for trust to be rebuilt.
Privacy and Secondary Use : pt1 : Context, consent and control
It's with secondary use that the UK insurance market has had most privacy problems in the last year or two. The first of two posts explaining why.
Privacy and Aggregation pt2 – ethical challenges for claims managers
In this second post about the aggregation of data, I look at the ethical and operational challenges it throws up for the insurance sector
Do the parts always add up? Privacy and Aggregation pt1
What privacy issues are policyholders most concerned about? In this short series, I begin with aggregation.
Insurance and the Privacy Controversy
Over the next 5 years, I believe tensions between the insurance industry and the general public around privacy issues will grow to be as controversial as the misselling of payment protection insurance is today. This is the first of a series of posts exploring privacy and insurance.
Flood, fairness and risk assessment – pt3
If a policyholder takes steps to reduce the risk, surely that's a good thing. This doesn't seem to be the case with flood insurance. Insurers want to rely on big structural defences. It's an approach inherent with dangers, not least that it might not work.
Great to see launch of the Insurance Fraud Register, but …
Today's launch of the Insurance Fraud Register represents a big step for the UK insurance sector, not least in how it has to now deliver a necessary service in a fair and transparent way. Several issues have clearly been resolved, but others remain to put support from the public at risk.
Parliament urges greater scrutiny of how insurance fraud is investigated
If the recommendations of a recent report by an influential group of UK MPs are adopted, the way in which insurance fraud is investigated will come under heightened public scrutiny
Might egocentrism affect judgements about insurance fraud?
How should insurance fraud investigators handle everyone's innate tendency towards egocentrism, especially when deciding on fraud cases outside of the court system?
Can you ever get enough risk data from Telematics?
How much can we expect from telematics? Some huge claims are being made for it, but a short cast back in history shows why expectations need to be cooled.
More on OFT, motor & ethics
A more detailed analysis of the ethics of what the OFT found when investigating motor insurance claims. Are referral fees unethical? How did corporate cultures appear to leave ethics by the wayside? The FSA and MoJ have some questions to ask, of individuals, insurers and themselves.
Ethics and Fraud – pt1
Tackling insurance fraud is an ethical thing to do, but the way in which insurers go about tackling it also has an ethical dimension. In this and a subsequent post, I set out the key themes around which a set of principles could be fashioned to embed some ethical thinking into how insurers tackle fraud.
Adjusters & conflict – part3
I explore how the move of larger adjusting firms to a multidisciplinary model could have weakened the profession's handling of conflicts of interest and compare this with the experience of accountancy firms. It's clear that perceptions matter and a 'trust us' response is insufficient