Oversight posts

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

Why Insurance Supply Chains create Ethical Risks
Supply chains in the insurance sector can be a breeding ground for unethical behaviour. Sure, there are good firms out[...]
Why Equality of Fairness will shape the Future of Insurance
Fairness in insurance has four dimensions. How they come together and interact is called equality of fairness. This will shape the future of insurance.
The Ethical Risks from Data Enrichment
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.
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.
Two rulings that threaten many digital strategies in insurance
Two rulings should set warning lights flashing for many a digital strategy in insurance. Insurers need to think carefully about their implications, for there are signs that others are.
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.
8 ways in which a digital strategy can build trust in an insurer
Digital strategies in insurance will be undermined if they don't build trust in the insurer. I explore why this is so, and present 8 ways in which an insurer should start looking
Ethical decision making is the best response to individual accountability
The rise of individual accountability for insurance executives has highlighted the importance of bridging the gap between ‘thinking about ethics’ and ‘doing ethics’. Ethical decision making is a set of skills designed for that purpose.
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
Data and Power pt1 – the starting point for insurers’ data ethics journey
The most significant ethical theme that insurers need to address over the next three years is data ethics. Yet it is complex and nuanced, so insurers need to think carefully about how to organise their response.
The final pricing report is about so much more than loyalty penalties
The UK regulator’s decision to ban ‘price walking’ in general insurance is significant. Yet that significance is wider than simply how policies are priced. I explore those signals so that insurers can start preparing now.
Is your code of ethics good enough?
You'd be surprised how codes of ethics vary across the insurance sector. What matters though is whether your firm's code of ethics is good enough for the ethical challenges it is facing.
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 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.
Why cognitive diversity can boost ethical performance
Cognitive diversity can be hugely influential when it comes to ethics. Views are encouraged, voices heard and challenges met. In such changing times for insurance, this matters
Why conflicts of interest are an exponential ethical risk
Conflicts of interest are an exponential ethical risk because of the powerful signals they send out about how your firm is managed. This creates all sorts of reputational risks.
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.
What impact does ethics training have?
Ethics training is a waste of time, unless it has an impact. All very good you might say, but what evidence is there for that impact? Detailed research in US financial services makes that clear.
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.
2 barriers to improving a firm’s ethical culture
Improving a firm’s ethical culture will succeed only if these two barriers are addressed. This week's blog post looks at what to look for and where to start looking.
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?
What is insurance? And why data analytics makes this matter
When does a firm become an insurer? And what is insurance? These are not nebulous questions. Data and analytics makes it hugely important that there be clarity around them.
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.
Pricing is a prudential risk that comes with complications
Pricing is now judged to be a prudential risk. Insurers need to handle it with care, for its ethical side makes it more nuanced than many realise.
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.
Are privacy concerns about to undermine pricing strategies even further?
Insurers could soon find themselves having to defend their extensive processing of consumer data. This is yet another consequence of the current pricing review.
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
Has genetic testing in insurance claims begun?
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.
The radical new approach to tackling insurance mis-selling
Mis-selling has been a perennial problem for the insurance market. In the last couple of years, the UK regulator's approach has changed, radically. Intermediaries and representatives should prepare for a new regulatory experience.
Why EIOPA is going about its data ethics principles in the wrong way
Data ethics principles are important for a sector like insurance. What also matters is the process by how you develop them. The process shapes the outcome, for better and, probably in EIOPA's case, for worse.
Politicians are burying the loyalty penalty: so what comes next?
The political writing is on the wall for the loyalty penalty. Yet the regulator will still face some difficult challenges to getting their response right. At least they've now got some powerful friends to help them.
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.
Will there soon be compulsory ethics training for insurance algorithms?
Ethics training is compulsory in several countries' insurance markets. So what happens when decisions are increasingly being made by algorithms? Should they have compulsory training too?
Are firms looking in the wrong place for unethical behaviours?
Many insurance firms organise themselves to be on the lookout for the big unethical scandals that might ruin their reputations. It may make sense, but it misses out something vital.
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.
Harsh lessons that UK insurers will learn from the pricing review
We’re starting to see the regulator’s response to the pricing super complaint take shape. And it’s pretty much in line with what I predicted back in September 2018. Yet their review is far from over. Some heated debate seems inevitable.
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.
Why supervisory technology will revolutionise insurance
Just as insurers are gaining new insight from all their data and analytics, so are regulators too. And the trajectory that regulators are taking could have profound implications for the market’s attitude to ethics.
Be honest with yourself: ethical dissonance and personal accountability
Addressing ethical dissonance will improve trust in your firm and reduce the risk to executives of personal regulatory sanction. Here's how to recognise it and organise your response.
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 confusion could become a key ethics metric for insurers
The quality of policy wordings could well be coming under close scrutiny soon - scored for comprehension and audited for confusion. Time for your firm to tune in.
The biggest ethical challenge facing insurers in 2019
The insurance sector will face some big ethical challenges in 2019 but one challenge will stand above all others. And surprisingly, it's not pricing.
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.
Could the new accountability rules spring one last surprise on UK insurers?
The pricing review could trigger a rethink by the UK regulator of an earlier doubt expressed in the new accountability regime. It's all about algorithmic trading
Assessing Integrity in Good People
What’s the point of assessing integrity? On the face of it, it’s to have evidence that your senior people understand what integrity means. Actually, that’s not the point you should be aiming for.
Don’t take the wrong approach to ethics training and integrity assessments
A lot of ethics training can please compliance providers, but it often has little impact on how insurance firms operate. That because it's evidencing the wrong thing. Here's why.
The underlying warning in the FCA’s report on household insurance pricing
The UK regulator's report on insurance pricing will have set alarm bells ringing at many insurers. The underlying warning in it represents a real challenge to many firms
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...
Application fraud – a vital component is missing
Application fraud is a big focus for insurers. The logic is that fraudsters are isolated before they get on your books. Yet it's fraught with ethical risks and missing one vital component.
The super complaint will put pricing practices under intense scrutiny
A super-complaint was delivered last week to the UK competition authority. It means pricing practices in the retail general insurance market will now come under intense scrutiny. I assess its origins and implications, and show how insurance firms can respond.
7 questions raised by broker fees
Broker fees are common across general insurance now. What ethical questions do they raise? And what can brokers do to manage their implications for client trust?
Answering the big questions about the principles for insurance pricing
The biggest event in 2019 in relation to ethics and insurance will be the announcement by the FCA that firms must demonstrate clear principles for insurance pricing.
2019 demands fresh new thinking on ethical risk
2019 will see ethical risk becoming more personal, especially for senior executives. Ethical frameworks need to be checked to ensure they're still robust.
Executive accountability is raising concerns – here’s the best response
New regulations are raising executive accountability. Insurance people are worried about their personal exposure to compliance failings. Here's their best response.
Research confirms the main reason for insurer failure in the EU is unethical practices
Why do insurers fail? It turns out that ethical problems play a big part. Insurance may be complicated, but it's the human factors that really matter.
Why smart policy wordings need to be handled with care
Many will be glad to see the end of longwinded policies. Yet be careful what you wish for. Smart policy wordings could present some uncomfortable surprises.
Insurer codes of ethics are not addressing the big trust issue
Insurance firms are changing, but their codes of ethics are not. My recent review found a distinct gap opening up. Some of the key issues were missing.
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?
Can insurance delivered over the blockchain be labelled trustless?
Many people see blockchains as crucial to the future of insurance. They're described as trustless, yet what does that mean, and is it a realistic claim?
The new pricing principles for insurance: origins, impacts and ideas
UK insurance is adopting new pricing principles for personal business. Yet in doing so, individual insurance firms will need to address some tough questions about controversial practices.
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.
Two simple ways to make a fair decision
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.
Dual Pricing in Insurance – the beginning of the end?
The next 12 months will see the pricing practices of UK insurers put under close regulatory scrutiny. Their focus will be on dual pricing in the household market. So what should insurance firms be on the lookout for, and how might they prepare for the spotlight about to be turned on them?
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.
A Vital Step to being Good at Ethical Dilemmas
There are many ethical dilemmas in insurance. And they often make people angry, and suspicious and fearful, and many other things besides. Yet that emotional side is often overlooked. Being good at ethical dilemmas can often hinge on how those emotions are handled.
The Ethical Problems at the root of the Mohammed and John Quotations
Two UK insurers have been accused of charging people more for motor cover if their name was Mohammed, than if their name was John. It has been vehemently denied by people across the sector. Yet the story has attracted widespread attention. And it’s unlikely to be a one off either. Here's why.
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.
A revolution will soon transform conflicts of interest in insurance
A revolution is about to transform conflicts of interest in insurance, and brokers, MGAs and insurers alike must be prepared for the repercussions. All firms, small and large will be affected.
Why insurers need to prepare for some tough scrutiny of their underwriting
Insurers have been using big data analytics to explore new underwriting techniques for several years now. Yet events are unfolding that point to the possibility of this coming under some harsh scrutiny by regulators and consumer groups.
Four Ethics Courses for Insurance Professionals
This year could be a daunting one for some insurance people. Over the next 12 months, they’re going to have their integrity assessed. And if they fall short, their certification to practice in the sector could be affected. These four ethics courses address this problem head on.
Why ethics training has to be a big priority for insurance people
The importance of ethics training for insurance people is going to soar over the next three years. And when I say soar, that’s no exaggeration. Insurance people are going to be weighed up and tested like never before. The main driver for this will surprise you.
Ethics in Insurance: the challenges ahead in 2018
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.
11 reasons why you should review your code of ethics
Codes of ethics are important documents. Yet they can often lie unchanged for several years. Codes then acquire a rather fossilised existence, losing their influence on how people work. Here are 11 reasons why it's worth reviewing them.
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.
The Ethics of Insurance Pricing – 7 risks underwriters need to have on their radar
Insurance pricing is undergoing a revolution, just at the time that underwriters are being held to account like never before. It’s important then for underwriters to know about the ethical issues that that accountability is built upon.
The need for a reorientation of corporate mindsets
Digitisation is transforming more than insurance. It's changing the mindset of the public too, and how they view ethics. Insurers need to respond to both.
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 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 – rock or 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[...]
A hugely significant decision for personal lines pricing
A landmark decision by US insurance regulators could translate into significant disruption for the UK personal lines market if the[...]
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.[...]
What do you need a Code of Ethics for?
Most of you will work for firms that already have a code of ethics. That's great, but most firms with[...]
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[...]
Privacy – how to challenge four common myths
There are a growing number of roundtables and conferences about insurance and big data at the moment. And at some[...]
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[...]
Consent: part of the changing landscape of insurance regulation
Consent is a term rarely mentioned in insurance circles, yet it lies at the heart of every policy sold by[...]
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 fare dodging.[...]
Signals that conflicts of interest send out about your firm
A conflict of interest is not a stand-alone ethical risk. To borrow a phrase, it has friends, and not very[...]
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[...]
One lesson for everyone looking at ethical risks
Understanding the ethical risks faced by your firm is fundamental to the success of any ethics programme. Yet if you’re[...]
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[...]
Where do you start looking for ethical risks?
Some ethical risks are relatively easy to spot: over generous gifts from suppliers for example. Other ethical risks can be[...]
Why pensions need more than just good governance – pt3
There are two significant sources of ethical risk associated with pensions: how you design them, and how you distribute them.[...]
Four lessons insurance firms should learn from the Wonga affair
Big data could revolutionise a firm’s understanding of its customers. Yet it could also blind the firm to common sense[...]
Fresh thinking on conflicts of interest for small firms: pt2
In the first of this pair of posts about how small firms might think differently about conflicts of interest, I[...]
Fresh ways for small firms to think about conflicts of interest: pt1
Small firms often feel under pressure from ethical issues like conflicts of interest. They lack the resources of their larger[...]
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 pt 2 – back to the drawing board?
The scale of the ethical challenge facing pension providers can be neatly illustrated by the fact that most people completely[...]
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 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[...]
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[...]
Price optimisation – approach with care!
Questions have already been raised about the ethics of dual pricing. This started out as the practice of offering new[...]
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[...]
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[...]
Insurers warned of a step change in regulator’s expectations of ethical conduct
Recent research has exposed a worrying gap between UK insurers and their regulator around expectations of ethical conduct in the[...]
Where do insurance firms go wrong with conflicts of interest?
Where do insurance firms go wrong with conflicts of interest? Their track record has not been good. Two problems stand[...]
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[...]
Aviva’s data theft response is revealing
Aviva's handling of the news of an apparent data theft by two of its own employees has been revealing. Some[...]
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.
Leadership on Ethics – 6 steps for making real progress
Ethical leadership doesn’t just happen – you need to build knowledge and skills around it. Here are six steps to help you make real progress.
Ethical leadership requires more than just ‘tone from the top’
How can ethical leadership start to make a lasting difference in at firm? Here are three ingredients to making it happen, starting with tone from the middle.
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?
A bit of ethics assessment can go a long way
Everyone in insurance should have access to ethics assessment tools. It empowers, motivates and engage staff on the ethical issues that matter most to them.
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?
Whistleblowing and the vital contribution of wider loyalties
A recent report shows just how important it is to get whistleblowing procedures right. One dimension to remember is the vital role played by wider loyalties
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.
What are UK insurers telling us about their ethical performance?
I review four ethics metrics in the public domain and look at what this might tell us about the sector's handle on ethical cultures
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.
Ethics at the heart of reforms to financial advice in Singapore
Regulatory reform of financial advice in Singapore is expected to see more ethics training for advisers, as well as ethics KPIs for their managers.
7 reasons why assessing ethical risks is a ‘must do’ for firms
So, you've decided to set ethical objectives for your firm, but what do you focus them on? Here are 7 reasons why an assessment of ethical risks is the best starting point.
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.
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?
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
Should insurers be more transparent about their lobbying?
Insurers have to disclose their political donations, but not their payments to those who lobby Government on their behalf. This is fairly typical of UK plcs, except that...
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.
Investing in Integrity is a new Charter Mark
The new Investing in Integrity charter mark has much to commend it, but will, like many of those before it, face some challenges. Greater transparency around the results of its accreditation would be a worthwhile step.
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.
Anti-bribery training
Transparency International has just launched an anti-bribery e-learning course. It's good, uses a lot of scenarios and it's free.
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.
Ethics reporting by FTSE100
Survey finds that less than 10% of companies in the FTSE100 report on their ethical performance. Those in the insurance and financial services sectors have good reason to make sure they're amongst that that do.
Cluster bombs still a live issue
The ABI and LMA need to show leadership on addressing the insurance of cluster bombs, as diplomatic scuffles continue around the convention banning them.
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[...]
More on the Bribe Payers Index
Last night's launch of the Bribe Payers Index 2011 shows little improvement in perceptions on bribery since 2008, plus some vulnerabilities in the 'banking and finance' sector's performance.
Reflecting on landmines
The launch of a new landmine charity is to be applauded, but its supporters from the insurance and broking community need to reflect on any association they may have with companies who manufacture ordnance of similar indiscriminatory effect, cluster bombs being the most obvious example.
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[...]
Insuring cluster bombs
There’s a lot to applaud in Aviva’s recent decision to stop investing in twelve arms manufacturers who failed to confirm[...]
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[...]