Claims posts

Insurance supply chains can be a breeding ground for unethical behaviour. Here are four reasons why this happens, and five ways in which it can be addressed.

The ethical risk that settlement walking represents is very real and far greater than price walking. Insurers need to evidence their position on it.

Data enrichment is a big thing in insurance at the moment, yet it needs to be thought of more critically. Its ethical credentials are weak, and coming under increasing challenge.

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 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.

Low consumer trust will hamper insurers' digital strategies and fuel regulatory interventions. A more critical culture and more rigorous data due diligence is needed.

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

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 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 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.

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.

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.

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.

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 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 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?

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?

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.

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.

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.

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 use of genetic test results in insurance is controversial. Yet doesn’t an agreement deal with this? Only partially it turns out. The gap is about to be exploited.

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.

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 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.

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.

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.

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.

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.

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’.

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.

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.

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.

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...

2019 will see ethical risk becoming more personal, especially for senior executives. Ethical frameworks need to be checked to ensure they're still robust.

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.

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!

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?

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?

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.

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.

In the midst of demanding situations and time pressures, there will be occasions when it will be important that we make a fair decision. What can we do to make this as easy and straightforward as possible? Here are two skills that will help.

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?

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.

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.

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.

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.

2018 looks like it will be an eventful time for ethics in insurance. Here are 11 areas where insurers will find the big ethical challenges.

Tackling fraud is an ethical thing to do, but the way in which insurers tackle it has an ethical side too. Here are 14 ethical questions for insurance fraud people to consider, along with a look forward into a new era of accountability.

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.

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.

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.

Aviva have a new system called Ask it Never, designed to eliminate the need to ask customers any questions when giving them a quote. The list of implications is impressive!

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.

With claims optimisation, are insurers abandoning all remaining hope of sustaining trust in a digitised market? It is innovative, but hardly ethical.

The UK regulator of financial services has shelved its plans for a market study into the use of big data[...]

At the heart of the training I deliver on conflicts of interest is this: a conflict of interest is a[...]

The ‘Ethics and Insurance’ blog has been a bit quiet of late, after my house was struck by lightening during[...]

Much of the attention being given to the impact that big data will have on insurance focuses on the personal[...]

In last Friday’s post, I outlined four dimensions of fairness that were relevant to delivering a service like insurance claims,[...]

Fairness is a complex thing. Insurance people often have a tendency to latch on to one way of looking at[...]

Hindsight is a complex thing when it comes to ethics. You may look back at something you’ve done and have[...]

The market for personal motor insurance is described by those on both the inside and outside as dysfunctional. It has[...]

People have a tendency to think differently in a group than how they might do so when on their own.[...]

At the heart of the role that claims people have lies the weighing up of a range of factors that[...]

This is the first of a four part series of posts looking at ethical awareness for claims people. In each[...]

What have been the most popular posts on the ‘Ethics and Insurance’ blog? Here is a quick look at the[...]

Two thirds of people will repeatedly buy from companies that are socially responsible. So said a leading figure in the[...]

How might consumers react to recent signs of insurance being offered on a pre-approved basis? Is there a sense that[...]

The scandal currently engulfing the car maker Volkswagen will undoubtedly feature in many an ethics course for years to come,[...]

A recent conference on 'big data and insurance' opened a window into the UK insurance sector's current thinking on what[...]

The first of the new conduct standards for insurers being introduced by the UK regulator from March next year is[...]

There’s concern that insurers’ use of big data will result in some sectors of society suffering discrimination. Data mining could[...]

The UK data regulator’s recent warning to UK insurers to keep within the law when seeking access to a proposer’s[...]

Earlier this year, a survey by the Federation of Small Businesses found that 5% of businesses had been asked by[...]

The UK insurance sector has been told in no uncertain terms that it isn’t doing enough ethical due diligence. The[...]

The trade body for UK doctors has recently issued revised guidance to its members about requests from insurers for copies[...]

Earlier this year, I wrote a post called ‘Data, Equality and Insurance’, about a small survey that I’d undertaken into[...]

Should policyholders be obliged to report incidents to their insurer, even if they’re not claiming for them? And how fair[...]

The Financial Ombudsman Service (FOS) has been weighing up the implications that big data will have for its work. And the[...]

Loss adjusting firms sit in the middle of complex supply chains, surrounded by insurers, brokers, contractors and the like. Appointments[...]

There’s one question that every policyholder has in mind when discussing their claim with a loss adjuster. It’s a question[...]

Loss adjusters have long had to address questions about the conflicts of interest their work puts them in. One hears[...]

The insurance market is entering a new phase, in which underwriting and claims practices are being transformed through access to[...]

Is intermediation ethical? This was a question put to me at a recent insurance event I was speaking at. It’s[...]

It's common now when taking out an insurance policy or reporting a claim, to be greeted with a warning about[...]

Insurers’ use of private investigators has been criticised for being “aggressive and inappropriate”. In response, their trade body, the Association[...]

Insurers in the UK now have new guidelines on the instruction and use of private investigators. While the guidelines have[...]

Privacy is an ethical issue that the UK insurance sector often thinks about, usually in terms of it being something[...]

Conflicts of interest have been in the ‘insurance news’ a lot recently, chiefly because of the UK regulator’s review of[...]

Data is the key challenge facing the regulation of UK financial services. So said a representative of the Prudential Regulatory[...]

This is the 200th post on the ethics and insurance blog, so if you don’t mind, I’ll take a quick[...]

Transparency is an integral part of how trust is established and sustained. Being open with someone about something that’s relevant[...]

What makes an ‘independent ethics committees’ work? Can they act as an effective counterbalance to business ventures that operate close[...]

In last week’s post, I explained why insurance firms need to integrate privacy protection into the big data dimension to[...]

In an earlier post, I looked at the first of two problems I often encounter when reviewing how insurance firms[...]

Aviva's handling of the news of an apparent data theft by two of its own employees has been revealing. Some[...]

How's this for a proposal? It should be mandatory for everyone involved in the investigation of insurance fraud to pass[...]

Back in 2012, I singled out privacy as the number one ethical issue that will confront the insurance sector over[...]

If, as the UK regulator emphasised recently, fairness is to be the dominant theme of 21st century financial services, how[...]

‘Fairness’ crops up a lot in insurance regulation – the chief executive of the UK regulator said recently that the[...]

3 ‘distinctly ethical’ questions stand out from the provisional findings of the Competition Commission’s investigation into the UK private motor insurance.

As many of us approach a new business year, make sure the metrics you're going to be using for ethics deliver the insight your firm needs.

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.

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?

How one insurance organisation got into hot water when it released claimant data that it thought had been suitably anonymised.

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?

UK insurers are failing to exercise proper control over their investigation of insurance fraud. Could too much 'group think' have been responsible?

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?

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.

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?

What are the ethical implications of insurers using predictive analytics for underwriting purposes? There's a clear line that underwriters should not cross.

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

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?

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.

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.

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.

How insurers use anonymised data has clear ethical implications, as well as risks that could trap the unwary and lead markets astray.

The way in which insurers handle anonymised data can raise all sorts of ethical questions, with implications for policyholders, underwriters and regulators

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.

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.

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.

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.

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.

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.

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.

News that the FCA is considering a major review of how personal lines claimants are being treated could have all sorts of ethical repercussions.

Could insurers' reactions to a recent survey of policyholders' experience of personal lines claims services open a window into their ethical culture?

A structured approach to assessing ethical risk that recognises market, firm and employee driven issues will help you focus more on underlying causes.

Measuring ethics is tricky, but necessary. Here are some of the pitfalls that measuring ethics can encounter, during the design, implementation and use phases.

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.

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.

How auditors have been grappling with ethical issues like conflicts of interest could be a learning experience for loss adjusters.

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?

Four examples of how insurance history might have been different if ethics had been measured. Time now for your firm to adopt some?

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.

How ethical is it for an insurer to seek a contribution from other insurers on risk for the same claim? There’s more to it than meets the eye.

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.

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.

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.

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?

Surveillance is one of the key privacy issues that insurers need to pay attention to. In this post, I’ll outline why surveillance can be so unsettling and later this week, set out why it’s an issue that insurers need to manage carefully.

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.

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.

In this second post about the aggregation of data, I look at the ethical and operational challenges it throws up for the insurance sector

What privacy issues are policyholders most concerned about? In this short series, I begin with aggregation.

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.

Insurers have to maintain public support for their crackdown on insurance fraud. That means avoiding surveillance practices like this one.

This grim tale from the US motor insurance market should serve as a reminder that every decision made in business is in some way ethical.

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.

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.

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

How should insurance fraud investigators handle everyone's innate tendency towards egocentrism, especially when deciding on fraud cases outside of the court system?

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.

The practices described in the recent OFT report into motor insurance may well have led to all sorts of unintended consequences for insurers. A couple are outlined here, along with some thoughts relating to a central issue for consumers: fairness.

Should a code of ethics refer to sustainability issues like the environment and supply chains? It can get a bit complicated...

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.

The OFT's report into UK private motor insurance makes for grim reading. It turns a spotlight onto practices that range from the dysfunctional to the wholly unethical.

If insurers become the lead provider of telematics technology, then spin-off services could produce all sorts of unintended consequences, particularly around the public's view of fairness.

Telematics certainly raises some ethical concerns, particularly around privacy. It does however have an important ethical upside.

What should insurers do to resolve the question of who will own the data created by their use of telematics in products like motor? One particular step might make a real difference, if handled properly.

The second of two posts about the ethical dimension to how insurance fraud should be tackled. Insurers need to look at these six themes as a step towards securing the long term support of consumer groups, and the public at large, for this important initiative.

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.

A delay in the launch of the Insurance Fraud Register should allow time for some key issues to be resolved. Heading up that list is consumer representation on its governing body.

Those selling insurance add-ons need to remember the lessons from payment protection insurance. This policy has its opt-out so hidden that it deserves investigation by the regulator.

As three insurers plead guilt in an Irish court to having information obtained illegally by a private investigator, is it now time for the insurance sector to see a clearer and stronger tone from the top to drive out these practices once and for all?

Are insurers really going to launch a national database of proven fraudsters without agreeing what they mean by fraud first?

The Insurance Fraud Register will be a national database of 'proven fraudsters'. So what is meant by proven and who decides that?

Does informed consent apply to insurance? How much should insureds know about what the insurer gets up to after the declaration has been signed?

UK motor insurers are using a business model that is ethically dysfunctional. The recent OFT report is a precursor to demands for some significant market reform.

Some thoughts on what a loss adjusting firm (and others in the insurance market as well) can do to improve their handling of conflicts of interest

EL insurers need to be much more proactive in responding to claimants searching for details of their employer's EL policy. That’s what acting with integrity is all about.

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

In this second post about loss adjusters and conflicts of interest, I look at the guidance on conflicts of interest issued by the sector's professional bod.y

Conflicts of interest have been a divisive issue for the loss adjusting profession in recent years. I explore the issues in a short series of posts. Part 1

The Insurance Fraud Bureau needs to reconsider its values and put some honesty and integrity into them

The insurance sector needs to take great care in how it manages the use of private investigators on potentially fraudulent claims, otherwise it could find its ethics sliding down the same slippery slope as the media

Do senior directors in the insurance market understand what conflicts of interest really are? There are lessons to be learnt from Allianz's venture into corporate litigation funding.

The Bribe Payers Index highlights the risks insurers face from bribery on construction projects

When a leading UK insurer is accused by a judge in court of artificially inflating costs and introducing ficticious charges,[...]

Credit hire companies are having a difficult year. The collapse of Brittannia Car Hire Services and financial problems at Helphire[...]

The increased attention being given to insurance fraud has led to calls for greater exchange of information between companies in[...]

It’s been a few years now since I was a member of AIRMIC. Their recent announcement of a model clause[...]