Insurance is becoming more complex and more fast moving. Yet 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?
A fair decision matters. It’s part of the regulatory obligations that insurance firms are under, to deliver the fair treatment of customers. And it’s builds trust with consumers as well, who invariably have a finely developed radar for what is fair or not. And I think it matters to us personally as well – if you want to be a fair person, you need to be good at walking the talk, by knowing how to make a fair decision.
Yet how do you do this in practice? Turn to the fairness protocols that your firm’s compliance people have put in place? You may find something of interest, but often only after digging around for a while. In the meantime, that decision is still demanding your attention, waiting for a fair outcome.
Here’s one approach that you can use at your desk, in a meeting, or in a conversation. It’s simple and flexible, and credible too, having been talked about in academic circles for a while. Let’s call it the ‘awareness check’.
The awareness check helps you weigh up the fairness of a particular decision by asking you to imagine yourself in a very simple situation. You have to imagine what decision you would make if you didn’t know anything about the particular consequences of that decision for yourself.
Let’s use an insurance example, set in a claims department. The settlement you’re about to propose to the claimant should be a fair one. It’s what your firm talks about in its code of ethics. It's what your chief executive means when she talks about integrity. And its what your boss means when he talks about trust. So in weighing up what settlement to propose, you should imagine for a minute that you don’t know anything about how insurance works. And you don't know anything about the financial resources you have. Finally, you don’t know how well that claim aligned with what was covered. You have to make your decision without any information like this.
What this does is put you in a position whereby you didn’t know anything of the consequences of that decision for yourself, if it was your claim that the decision was about. In taking that decision, you have to weigh up whether you would personally be prepared to accept the consequences of your decision, not knowing how great or small they might be.
It is of course hugely difficult to detach ourselves to this extent, but what it does highlight is that the fairness of a decision is hugely influenced by our own personal willingness to accept the worst, as well as the best, consequences of our decision.
An alternative to the awareness check for reaching a fair decision is what I call the ‘revered perspective’ test. Think of someone you particularly look up to, someone whose judgements and resolution you admire. It’s best for this person not to be in your firm, or indeed in insurance at all, and also not amongst your family and friends. An independent mind.
Now take that situation in front of you and think of how that ‘revered person’ would view the decision you’re about to make. Would they support you, or argue against you? How would they judge the fairness of what you’re about to do?
What both of these approaches to a fair decision do is help us avoid seeing things from too narrow and self interested a perspective. It’s something that I think the insurance sector can struggle with at times.
The shape and size of that perspective can often be framed for us by the systems that support the work we do. What options do they present us with? What checks stop us from doing what you see as being fair? I’ve come across systems that help insurance people work with greater efficiency, but not in particularly fair ways. This points to fairness needing to be a component of systems design, otherwise the firm is in danger of hardwiring unfairness into the way things get done there.
And I believe we can all recognise what fairness looks like. My daughters certainly do when it comes to sharing out a pizza. We need to keep that knowledge front of mind in our work as well.
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.