Oversight - challenging times ahead 

The oversight role in insurance firms has been put into the spotlight with the introduction of SMCR and by market studies like that for retail GI pricing. Looming up fast is the impact of supervisory technologies. That's why knowledge of the ethics issues associated with insurance can go a long way to managing this big picture. 

Choose from one of these 'ethics and oversight' themes. If you just want to browse, click here, or use the search box below.  


Technology

Digital technologies are transforming not just insurers, but supervisors as well. No wonder Chris Woolard felt confident enough to tell the UK Treasury committee in February 2019 that the FCA has “the resources and expertise to pick inside those insurance models”. It is a bold statement backed up by a strong team of data scientists. And the implications for oversight of insurance firms are profound.   

Find out what the ethical issues are...

Why supervisory technology will revolutionise insurance (link)

How good are your firm’s algorithms? Can you prove it? (link)

Could algorithms make insurance firms ungovernable? (link)

Why data is the key regulatory challenge in financial services (link)

Can insurance delivered over the blockchain be labelled trustless? (link)

ethics big data insurance 11 principles

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Client Case Study

The increased use of digital technologies by regulators is set to transform accountability and oversight across financial markets. And with the UK regulator seen as a leading innovator in this field, this client wanted to understand the implications for its business.

Drawing on my own research and information in the public domain, I provided them with a detailed picture of present and near future developments, how best they might prepare and respond, and the advantages that could flow from all this. The result was a firm with a new mindset about engaging with regulators. 

Accountability 

Expectations around accountability are rising, and accountability itself is becoming more complex. Running through both of those patterns are ethical issues like fairness, privacy and integrity. What is important therefore is for people in oversight roles to understand the ethics of all this like never before, to recognise what matters and what can be done about it. 

Client Case Study...

One of the challenges that people in oversight roles face is staying on top of the less tangible issues circulating around a firm. Ethics is invariably one of them. Is what you’re seeing representative of the ethical issues that the business is facing? Are there things on the horizon that we need to start looking at?

I’ve worked with a number of committees helping them to see ‘the wood for the trees’ on ethics, as well as the ethical implications of emerging trends. This is all about being a critical friend, providing constructive insight, guidance and challenge. 

Find out what the ethical issues are...

The big ethical challenges facing insurers in 2020 (link)

The three lines of defence model is not working for insurers (link)

Behavioural fairness is a serious risk to the future of insurance (link)

Insurers must prepare for big changes around genetic testing (link)

The final pricing report is about so much more than loyalty penalties (link)

The Great Accountability Challenge facing Insurance Leaders (link)

How good are your current ethics measures?

measuring ethics

Assessing Integrity

"What's the point of assessing integrity" is a question put to me on occasion. And it's a question worth raising, for on its own, assessing integrity achieves little. What matters is the problem that needs addressing and the solution to which is bound up with questions of integrity. Find the problem, identify the solution and align your assessments of integrity with the practicalities of delivering better decisions and better outcomes. So the real question for people in oversight roles is actually "what better decisions are our people making' as a result of all this assessments.  

Find out what the ethical issues are...

Assessing Integrity in Good People (link)

Don’t take the wrong approach to ethics training and integrity assessments (link)

Why ethics training has to be a big priority for insurance people (link)

Click here to read more about learning about ethics.

And click here for courses I've designed to help insurance firms deliver this.

How good are you? Find out with this guide...

ethical dilemmas

Client Case Study...

Firms often have an assortment of assessment material relating to ethics and integrity, built up over the years in response to various needs. This client asked me to look at their existing material.

What we found was patchy – it was good in parts, but also out of date and incomplete in other parts. The project then looked at what the firm needed going forward, and at how that could then be better integrated in the learning management systems. The parts were now starting to add up to something, and just as importantly, mean something to the people the assessments were designed for.   

Codes of Ethics  

Codes of ethics have often been seen as one of those 'nice to have' things, assembled with interest and then largely forgotten about. That's no longer an option - the regulator's emphasise on knowing your firm's purpose and delivering it through key statements and processes has renewed interest in codes of ethics that actually do something. This is where you can find out how good you firm's code is and what you can do about it.

Read this detailed study of the codes of ten leading UK insurers...

codes of ethics

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Some of the Insight I provide to Clients...

What’s the point of having a code of ethics? So many insurance firms have them, but it’s clear from working with insurers over the years that some have struggled to address that question, beyond ‘every firm needs one’. And unless it’s addressed, many codes of ethics will just gather dust while the business marches on. The review to the left found some startling levels of neglect.

Why keep policy baggage lying around? Find a purpose for your code of ethics and, like any other piece of corporate kit, put it to use, to achieve something. And after a few years, review that purpose and drive the code forward again, deliver something the business needs.

Find out what the ethical issues are...

Is your code of ethics good enough? (link)

What do you need a Code of Ethics for?  (link)

An important lesson for insurers to learn about their codes of ethics (link)

How can insurers get people to open and read their codes of ethics? (link)

Insurer codes of ethics are not addressing the big trust issue for consumers (link)

11 reasons why you should review your code of ethics (link)

Risks and Targets  

Knowing the ethical risks faced by your firm, and then which ones to prioritise, must be central to your firm's management of its reputation. Yet ethical risks lie on several levels and there's an ever present danger of only seeing the risks you're happy with. So it's important to stand back and take an informed and structured approach, both to recognising and responding to them. There's a lot here to guide you in the right direction.

Client Case Study

This insurer recognised that its strong and distinctive culture might actually cause it to miss some ethical risks. It asked me to conduct a thorough review, which found much that was good. However, as they suspected, it also found that something significant was missing. It just took a fresh look from outside to see it.

And their response was admirable, for it is now one of the key aspects of the firm’s identity, overseen by the board alongside other more obvious issues

Find out what the ethical issues are...

Where do you start looking for ethical risks? (link)

Six steps towards a more robust ethical risk assessment (link)

Conduct risk appetites are double edge swords, so handle with care (link)

Measuring ethics: the move into mainstream (link)

One lesson for everyone looking at ethical risks (link)

This guide will get you started...

how to assess ethical risks

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Conflicts of Interest

How an insurance firm handles its conflicts of interest sends out all sorts of signals: about its ethical culture for example, and about how accountability is managed. Yet conflicts of interest often seem so awkward and perennial. Having a clear, honest and realistic approach to them helps address that problem. There's a lot about conflicts of interest here - below is a sample. Get in touch for more. 

Find out what the ethical issues are...

A checklist for conflicts of interest in insurance firms (link)

A revolution will soon transform conflicts of interest in insurance (link)

Signals that conflicts of interest send out about your firm (link)

9 ways to critique a board report on conflicts of interest (link)

If you're at the stage of weighing where your main conflicts of interest risks lie, have a look at this free guide - 'How to Assess Conflict of Interest Risk'

How good are you? Find out with this guide...

conflicts of interest
 Some of the Insight I provide to Clients...

Insurance is full of conflicts of interest. Take them away and the market would largely collapse. So the ethical question with conflicts of interest is not ‘do we have any’, but ‘what are we doing about them’? There’s no point have a corporate policy that banishes them – people will just ignore the code and carry on as usual.

So what are you doing about your conflicts of interest? And is it enough? Have you taken the ‘gross / net’ gap into account? Remember that regulators are now equipping themselves with the digital tools to find this out for themselves.

I help oversight people to understand more about ethical issues so that they can make better decisions...

I  help compliance and oversight people understand the ethical landscape in which their firm is operating. Looking beyond the rule-book helps to scope the overall risk landscape and deliver a more confident response.

I work with firms to identify what they should set as their ethical priorities, and then help them to calibrate their response. It’s all about focusing on what matters most, so that progress makes a difference.

Ethical issues can sometimes exist on several layers, the unpicking of which is important for calibrating the right response. My experience helps with this enormously, allowing firms to proceed with greater confidence.

Firms can be at risk from ‘ethical fading’, often when working up close with persistent ethical exposures. The insight and challenge I’ve brought on such occasions has helped firms to step back and really consider what they're doing and how they're doing it. 


Other Resources

Use this free guide to help with your firm's assessments...

assessing an employee's ethical strengths

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More articles...

How to start getting results from ethical due diligence (link)

Conduct and Ethics: why insurers need to understand the difference (link)

Are ethics and compliance different? And why it matters (link)

Be honest with yourself: ethical dissonance and personal accountability (link)

Courses on Ethics and Insurance

Most assessments will find some gaps in either knowledge or skills when it comes to the practicalities of ethics in the insurance market. That's why I've creates these four courses, each of which is focused on insurance people.  

Ethics : what it means, what it matters, and what is expected of me

Ethical Decision Making

Tackling Ethical Dilemmas with Confidence

Leadership on Ethics for Insurance Executives

Click here to find out more.

Recent articles relating to Oversight...

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.

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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.

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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.

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