Oversight posts

These posts are all about the oversight of ethics, both internal through non-executive directors and compliance, and externally through regulators.

A Framework for Trust and Growth in a Digital Market
Insurers need to grasp the ethical issues underlying trust and growth in a digital market. This framework provides them with a template for doing so.
Have brokers done enough to improve their handling of conflicts of interest?
Have insurance brokers done enough to improve their handling of conflicts of interest? 3 years ago, the FCA identified multiple problems. So how have things changed?
5 crippling beliefs that get in the way of people addressing ethics
I’ve come across a number of beliefs that get in the way of insurance people getting behind their firm’s push on ethics. Here's 5 of them.
Can an insurer make too much profit?
Insurance is a risky business, so the idea of an insurer making too much profit seems a bit harsh. Yet some in Australia would disagree, where profit levels on compulsory motor insurance are being hotly debated.
Accountability in an era of algorithm driven insurance – between a rock and a hard place?
There a question mark forming over the capacity of board members of insurance firms to perform their oversight duties effectively.[...]
Could algorithms make insurance firms ungovernable?
It sounds a bit scary, but could big data result in the oversight provided by board members of an insurance[...]
Is big data steering insurance towards a cliff or a superhighway?
It was great to see the panel I was on last week to debate the above question attract a full[...]
Addressing the key question for 21st century insurance head on
Europe’s leading experts on computing, privacy and data protection (CPDP) will be brought together at a conference this week in[...]
It looks like the FCA really does not understand big data
A recent speech by the chief executive of the UK regulator for insurance focused on big data. It clarified one[...]
Has the UK regulator got it wrong on big data?
The UK regulator of financial services has shelved its plans for a market study into the use of big data[...]
There are two sides to Triple M insurance
It’s becoming fashionable, in this increasingly mobile orientated world, to question why insurance is sold on an annual basis. One[...]
Six steps towards a more robust ethical risk assessment
It’s approaching halfway through the year and, let’s assume, you’re on notice to give a presentation to management about the[...]
Building a persuasive argument on fairness
A fundamental challenge facing the insurance sector is how to differentiate between risks without that turning into discriminating between risks.[...]
Price optimisation: will insurers face new rules?
The Chartered Insurance Institute has recently published a paper I wrote about the implications of price optimisation for the UK[...]
Whistleblowing – rewrite the policy, the processes, the lot
The new rules on whistleblowing that UK insurers will soon have to adhere to will bring about more fundamental change[...]
Name and shame: an effective response to misconduct?
When there has been misconduct at an insurance firm, how would you feel about the names of the individuals involved[...]
Ethics and Insurance: what to watch for in 2016
Every insurance firm should be monitoring the ethical events and trends that influence its business. This reduces the unexpected, enables[...]
What employees say about managers and ethics at work – Part 2
Much is made of the ‘tone from the top’ – the strength and consistency with which senior executives guide the[...]
Could price optimisation soon be banned in the UK insurance market?
We know that price optimisation is an established feature of many markets – hotel beds and airline seats for example.[...]
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[...]
Insurers’ right to know: a line is drawn
Do insurers have an unimpeded right to see your complete medical record? A UK regulator has just ruled that they[...]
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[...]
A confrontation over insurers’ right to know
The trade body for UK doctors has recently issued revised guidance to its members about requests from insurers for copies[...]
Conduct risk appetites are double edge swords, so handle with care
Many insurance firms will be checking their conduct risk appetites after the UK regulator emphasised their importance in a recent[...]
Four legs that a conduct risk appetite needs to stand on
The UK regulator has castigated insurers for not having a clear conduct risk appetite for their delegated authority business. Some[...]
Assessing integrity: how should insurers respond to the new rules?
Insurers in the UK will soon have to carry out ‘fit and proper’ assessments of executives performing certain key functions,[...]
Measuring ethics: the move into mainstream
Measuring ethics is starting to become mainstream in insurance. This is because the soon to be introduced senior insurance managers[...]
Will financial inclusion be even more difficult to deliver than in the past?
There are structural changes underway in the UK insurance market that seem to point to financial inclusion becoming even more[...]
Why fairness will be central to the insurance response. Financial inclusion pt2
The chief executive of the UK’s Financial Conduct Authority said back in October 2013 that fairness would be the dominant[...]
A radical change in insurance regulation is underway
The Chartered Insurance Institute has recently published a paper by me, entitled ‘The Digital Panopticon and the New Power of[...]
Vulnerable consumers and price optimisation: a reputation wrecker?
Vulnerable consumers have been in the spotlight recently, following some research papers issued by the insurance regulator. And many insurance[...]
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[...]
Conduct and Ethics: why insurers need to understand the difference
Earlier this week I looked at the difference between compliance and ethics, and at why that difference matters to insurance[...]
Are ethics and compliance different? And why it matters.
I occasionally come across companies who question the need to consider ethics, on the basis that they've got all that[...]
What lay behind the FCA’s decision on the fare-dodging banker?
The director of a UK investment firm has had his career in financial services terminated after being caught fair dodging.[...]
A new era of accountability for senior insurance managers
The prudential regulator for UK insurance firms is consulting on regulatory changes that it hopes will herald a new era[...]
The Ethics of Flexible Commissions
The UK regulator is said to be ‘incredibly interested’ in the flexible commission arrangements that exist between some commercial insurers[...]
Is the London market sailing in troubled waters?
Changes underway in the London market are creating ideal conditions for ethical risks to multiply. No wonder internal auditors at[...]
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[...]
Pensions and annuities pt1: will insurers rise to the ethical challenges facing this market?
The pensions and annuities market in the UK is huge. It is also complex and undergoing considerable change, or to[...]
Should whistleblowers be rewarded? Here’s the FCA’s strategy on this.
Should whistleblowers be incentivised with monetary rewards? The UK Government challenged its regulator of financial services to seriously consider introducing[...]
Price comparison websites: consumers need more than what it says on the tin
‘Does exactly what it says on the tin’ is a phrase often used to praise a close alignment between what[...]
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 fear of retaliation: a new milestone in whistleblowing
Regulators of the US financial services market have successfully concluded their first case involving whistleblower retaliation, against a firm who improperly[...]
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[...]
9 ways to critique a board report on conflicts of interest
The UK’s regulator’s recent report into how insurance brokers in the SME market were handling conflicts of interest will hopefully[...]
3 ethical responsibilities that insurance firms are being ‘put on notice’ about
Two events from last week hold particular significance for the ethical responsibilities of the UK insurance sector. They signal a[...]
Price optimisation pt2 – key losses that insurers face
Around half of UK motor insurance is said to be priced according to some form of price optimisation. If so,[...]
How good are your firm’s whistleblowing arrangements?
Insurance firms in the UK should allocate some time during 2014 to look over their whistleblowing arrangements, for whistleblowing is[...]
The ethics of big data – a critical window of opportunity for insurance firms
Insurance has always relied on data. And with the mainstreaming now of revolutionary techniques for how data can be acquired,[...]
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[...]
Insurance firms should start preparing for two waves of whistleblowing reform
The UK financial services sector has a poor record on whistleblowing. Over the next few years, firms will be put[...]
Should a new professional body for banking interest insurers? Absolutely!
In recent years, UK insurance firms have been eager to reassure key audiences that when it came to ethics and[...]
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[...]
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[...]
Long term Insurance: how insurers can navigate this perfect storm – pt4
What should insurers do to ensure that long term insurance markets evolve with as much of the ethical upside of these changes, and as little of the downside, as possible?
Long term insurance: the spectre that is polarisation – pt3
As data flows in and policies become personalised, how will insurers avoid genetic information creating a polarisation of long term insurance markets?
Could long term insurance be heading into a perfect storm – pt1
There are trends in the long term insurance market that, if seen through to their conclusion, could have significant implications, both ethical and social.
Are those who do the mis-selling victims or villains?
Should we see the sales advisors involved in the mis-selling of protection policies at Lloyds Banking Group as victims or as villains?
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.
Insurance, Markets and the Common Good
Could insurance be considered as a form of common good? There's a case to be made, and it sheds light on some current trends in the global insurance market.
Fairness, ethical culture and the FCA rulebook – how they all interact
The UK regulator for financial services has planted the idea of fairness at the very heart of the sector's future. It's a bold move, but can he deliver on the promise?
What every UK insurer should adopt as an ethical objective for 2014
The regulator expects every UK insurer to understand how its ethical culture is influencing 'why we do what we do'. There's a lot to be leant.
Is there an ethical flaw in the FCA’s position on enforcement warning notices?
Is there an ethical flaw in the FCA's new powers to issue enforcement warning notices?
The UK life market needs urgent action to address ethical culture
FCA’s damning report into life market practices shows the need for stronger leadership on ethics from senior directors, particularly around ethical culture
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?
Ethics and Underwriting – five themes every insurer needs to consider
Over the last couple of years, I’ve looked at the ethical dimension to a variety of underwriting practices. These have[...]
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.
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?
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.
Big data, ethics and the right to know and challenge
Insurers seem to have more data than they know what to do with. How will this influence policyholders' right to know and challenge what is held about them?
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.
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?
How can you reward firms for ‘doing the right thing’?
I was one of the speakers at a round table discussion yesterday about rewarding firms for 'doing the right thing'. Here’s what I had to say.
7 reasons why assessing ethical risks is a ‘must do’ for firms
So, you've decided to set some ethical objectives for your firm, but what do you focus them on? An assessment of ethical risks is a good starting point. Here are seven reasons why.
Assumptions: one of the next ethical battlegrounds for insurance
It's reassuring to see an aggregator acknowledge the ethical issues from underwriting and purchase assumptions, but what's going to be done about it?
Having a business objective for ethics says a lot about your firm’s ethical culture
A recent study indicated that most insurers fail to set a business objective for ethics, yet to do so is a key indicator of a firm's ethical culture.
Measuring Ethics – many firms have a long way to go
Recent surveys show that only a small number of firms measure their performance on ethics. I look at why this may be so and the implications it has for compliance.
Ethics Ebooks available for Free Download
I've published some ebooks on topical ethical issues for insurers, available for free download at my consultancy website. They cover consent, privacy and insurance fraud. Enjoy them!
Privacy and Consent – pt5 – Time for a New Mindset?
Consent is fundamental to how markets work, but can be a challenge for sectors like insurance. Will new EU regulations force the sector into a new mindset about customers' information?
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 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
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
Motor Insurance and Fairness
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.
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.
Telematics – pt1 – data
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.
Telematics and privacy
Telematics looks set to revolutionise motor insurance. Insurers need to focus on the transparency and confidentiality issues it raises and how those are to be respected through the policy lifecycle.
Assumptions and Transparency
The transparency of price comparison websites has come under renewed scrutiny. The way in which their assumptions are often pitched is raising questions about who's interests are being put first. The new Act makes addressing such concerns more important than ever.
Whistleblowing Bounties
The Dodd Frank Act in the US has introduced a bounty system for whistleblowers who provide the SEC with original information that leads to a successful prosecution. What sort of ethical questions does this raise? And might the SFO adopt such an approach here in the UK?
Could a premium increase be unethical?
Could a premium increase ever be seen as unethical? A US regulator took that view recently. It raises some interesting questions about how insurance works.
Executive responsibilies
There are clear lessons for insurers from LBG's bonus clawback in relation to PPI misselling
Motor and the OFT
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.
Tracing an EL insurer
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.
RBSI and complaints
The FSA's £2.17m fine for RBS Insurance is less about lack of skill, care and due diligence and more about a failure to build a culture in which ethical behaviours are respected.
Swinton, Covea and conflicts
The recent sacking of Swinton's entire executive board raises just as many questions about Covea's responsibilities as it does about those director's responsibilities. There are conflicts of interest here at several layers.
More on Homeserve
Homeserve are outsourcing their complaint handling. Hopefully this will involve pro-actively contacting those who could have been mis-sold one of their policies. Let's hope they're learning from this saga.
Contacting mis-sold customers
Homeserve is expecting to lose about 5% of its customers as a result of mis-selling problems in its household insurance[...]
Insurance and Secrecy
The insurance sector is associated with jurisdictions that are being labelled as 'secretive'. It should expect to face greater scrutiny and more demanding questions about its involvement there. Insurers would do well to put this issue on their ethical radars.
More about insuring cluster bombs
The Convention on Cluster Munitions came into force last year, after being ratified by 30 states. Yet there is still[...]
Jack Straw’s Bill
A few days ago, Jack Straw, the former Justice Secretary, put forward a private member’s bill that, amongst other things[...]
The FSA and Willis
The key message that comes out of the Final Notice issued last week to Willis by the FSA for failures[...]
Fit and Proper
One aspect of the current phone hacking scandal that the insurance sector should monitor is how OFCOM goes about exercising[...]