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 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?
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.
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.
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.
The sector’s approach to insuring people with mental illness is under scrutiny. So what are the ethical dimensions that insurers need to grasp? And looking forward, what market developments could make this situation even more ethically charged?
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.
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 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.
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.
In ethical terms, this is a vital stage of the underwriting process. How well the ethical issues are handled at this product design stage will have a huge influence on the ethical ups and downs associated with the policy later on.
There have been some emotive headlines recently about people with a poor credit history having to pay more for their motor insurance. It highlights why assumptions about how people behave when faced with difficult choices are not always reliable.
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.
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.
Does the UK insurance and financial services sectors face a ‘napster moment’ around how they engage with customers? In other words, a point at which someone from outside the industry comes in and reinvents how things are done.
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.
The debate about the future affordability of flood insurance is really about the extent to which existing policyholders could be excluded from the 'insured community'. Recent research from Scotland is starting to put numbers and costs to this.
An agreement on the provision of flood insurance has so far eluded insurers and the UK Government. The debate has touched on some ethical points that insurers should take note of and I’ll be exploring them in this and the next few posts
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.
The telematics debate continues to recognise privacy as an issue, but still stops short of addressing how it should be tackled, let alone resolved. This hesitancy will become a millstone around the necks of insurers unless they address consent.
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.
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.
Big data could herald an entirely new way of thinking about the relationship between insurer and customer. It will have transparency at its heart and rely on new ways of behaving with customers. Ethics and insurance will never be more reliant upon each other than they need to be in this new world of insurance.
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.
The end of utmost good faith came a step closer yesterday for personal lines policyholders, with the Consumer Insurance (Disclosure and Representations) Bill completing its committee stage in the House of Commons. It's time for insurers to be innovative.
Motor insurers need to take their ethical responsibilities more seriously when it comes to a unified approach to fronting. The forthcoming Insurance Fraud Register means this needs to be addressed now.
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.