Underwriting posts

These posts are all about the ethics of insurance underwriting. It's a big subject and you'll find a wide range of posts providing you with guidance, insight and challenge. 

The Ethical Challenges facing Open Insurance
Open insurance may be the next big step forward for insurance, but it will struggle to succeed unless a variety of ethical issues are addressed.
Why Insurance Supply Chains create Ethical Risks
Insurance supply chains can be a breeding ground for unethical behaviour. Here are four reasons why this happens, and five ways in which it can be addressed.
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.
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
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.
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.
Why pricing data can send out all the wrong signals
Insurance people used to think of pricing as just a market thing. Now they recognise that fairness has to be factored in as well. Yet the ethics of insurance pricing has other dimensions that need to be factored in. If they're not, the current pricing review will take even longer and become even more tortuous.
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.
The radical ways in which time is changing insurance
The need for annual or long term insurance policies is being questioned. A new temporality of insurance is emerging, with significant ethical implications.
Nudging, ethics and modern insurance design
Nudging is a concept at the heart of much 'new thinking' about insurance. Yet it's a complex thing and insurers need to take care when using it in the design of new products and services.
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.
Are loss prevention initiatives just trojan horses for data harvesting ?
A buzz phrase in the insurance market at the moment is ‘ecospheres of prevention’. It sounds like exciting stuff, but it is also replete with questions of ethics and power.
Behavioural fairness is a serious risk to the future of insurance
An influential narrative has emerged within insurance in recent years, centred upon the notion of behavioural fairness. It's a narrative that could determine how insurance evolves over the next decade. The problem is that it's a narrative with significant flaws.
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.
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.
A dangerous regulatory mindset that will undermine trust in insurance
'Not our problem' is the conclusion the UK regulator has reached about personalisation, the most fundamental change happening in insurance. So why is the FCA being so myopic? And how should insurers respond?
Is signposting as ethical as the market believes?
Signposting is being set up across a variety of retail insurance markets. The aim is to help consumers find the cover they need. Yet signposting is also a symptom of a stratifying market and that comes with all sorts of ethical implications.
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.
How positive an influence are reinsurers having on data ethics?
Reinsurers are an influential bunch. This makes their approach to data ethics important. So it's troubling then that their messaging seems to be so mixed
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
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.
Why Honesty and Purpose will change the Conduct Agenda
What is an insurer there for? It's a question that every insurer, new and old, needs to understand and address with honesty, for it drives how a business is run.
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.
Actuarialism and its influence on trust in modern insurance
Actuarialism involves only seeing your customers through the lens of data and analytics. It's now an established trend across many insurance markets, but it could also lead to some huge trust issues for the insurance sector.
Is underwriting at claim stage a reputational timebomb?
A pattern is emerging across the market that points to a new type of underwriting. And it is pretty revolutionary, as well as controversial. It is being referred to as ‘underwriting at claim stage’.
How do you feel about insurers tracking and analysing your emotions?
Insurers are using data and analytics to track and predict our emotions. Yet using it in underwriting and claims decisions raises some significant ethical issues. Here's why.
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.
Data and analytics: the problem that insurers will have with identity
Data and analytics is changing insurance in all sorts of exciting ways, but it's also raising some fundamental ethical questions. The first we'll be looking at is identity
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.
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
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.
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.
Is a retreat from insurance underway? Not by consumers, but by insurers
Insurers talk about moving customer relationships from ‘indemnity me’ to ‘keep me safe’. Does this represent the start of a retreat from insurance?
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.
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.
Access to medical records is controversial but achievable
Should insurers be given access to digital medical records? The question has more ethical angles to it than you might first think. This post explores them.
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.
Are actuaries ready for a new era of accountability in insurance?
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.
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?
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.
Personalisation – could it take insurance into a digital winter?
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.
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.
Ethical storm ahead – insuring people with experience of mental illness
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?
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.
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.
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.
Destructive demand: Is it happening in insurance underwriting now?
Destructive demand can damage the reputation of insurance. It happened with referral fees. Could it be happening again with underwriting data?
Smart contracts in insurance: clever but dangerous
Smart contracts in insurance open up all sorts of opportunities. And they sound clever and exciting, but they also raise questions. How will they influence trust in insurance?
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.
The debate on pricing autonomous vehicle policies has missed the point
How will autonomous vehicles affect personal motor premiums?  The debate has so far been based around risk, some saying consumers[...]
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[...]
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[...]
Ethical Awareness for Underwriters: pt3 – over optimism
Despite selling a product that’s based upon risk and losses, insurance people are actually quite an optimistic bunch. And that’s[...]
Ethical awareness for underwriters: Pt2 – the self serving bias
The scope of what underwriters need to have on their radars is getting ever wider. The expanding horizon of rating factors[...]
Ethical awareness for underwriters pt1: the tangible / abstract divide
Insurers are being urged to improve how they represent ‘the voice of the customer’ in the design and roll out[...]
The Pursuit of Non-Disclosure: a curious example from the life sector
Insurers are talking about significant levels of non-disclosure in life insurance, yet the message being conveyed has many layers to[...]
If I could wave an ethical magic wand over just one part of insurance, I would point it…
If I could wave a magic wand and transform, in ethical terms, just one cog in the lifecycle of an[...]
Will life insurers show leadership on big ethical issues?
Two years ago, a senior manager at a leading reinsurer wrote an article entitled “NO wearable device = NO life[...]
Are we seeing the start of a ‘retreat from insurance’?
It’s becoming fashionable amongst insurers to talk of turning themselves into providers of lifestyle services to customers. It’s portrayed as[...]
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[...]
Equal Treatment: pt4 – the spectre of polarisation
The draft EU directive on equal treatment is important, but for the insurance sector, it might progressively become an irrelevance.[...]
Equal Treatment: pt3 – Transparency on a vast scale
The draft EU directive on equal treatment could herald a new era of transparency, but are regulators, let alone insurers,[...]
Equal Treatment: pt2 : on a collision course with price optimisation?
The draft EU directive on equal treatment relies on ‘actuarial principles’ for establishing whether proportionate differences in treatment by insurers[...]
Equal treatment pt1: will rating on age and disability soon be deemed unfair?
Should insurers be allowed to differentiate between risks on the basis of age and disability? The sector is worried that[...]
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[...]
Fairness and FloodRe
We are less than thirty days away from the launch of FloodRe, the UK reinsurance scheme for eligible properties in[...]
The atomisation of insurance
The insurance sector is on the cusp of fundamental change. And at the heart of that change is the sector’s[...]
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[...]
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[...]
The top posts on the ‘Ethics and Insurance’ blog – 2015
What have been the most popular posts on the ‘Ethics and Insurance’ blog? Here is a quick look at the[...]
Why corporate social responsibility is failing to build trust in UK insurers
Two thirds of people will repeatedly buy from companies that are socially responsible. So said a leading figure in the[...]
Pre-approved insurance – what are the implications?
How might consumers react to recent signs of insurance being offered on a pre-approved basis? Is there a sense that[...]
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 lessons should insurers learn from the VW scandal?
The scandal currently engulfing the car maker Volkswagen will undoubtedly feature in many an ethics course for years to come,[...]
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[...]
The dangers of unintentional discrimination
There’s concern that insurers’ use of big data will result in some sectors of society suffering discrimination. Data mining could[...]
Medical records and consent: a time for change
The UK data regulator’s recent warning to UK insurers to keep within the law when seeking access to a proposer’s[...]
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[...]
Self driving cars: a classic ethical question for insurers
Self driving cars will transform personal travel and in doing so, will pose some interesting questions for insurers. One question[...]
Insurance, Fairness and the work of Marie Curie
There's a view becoming established in the UK insurance market that it's only fair that premiums should become more personalised[...]
How objective is the data your firm uses to make decisions?
An insurer told me recently that the only reason for a huge increase in a renewal premium was because of[...]
Why that magic element of big data could be fatal for insurers
Earlier this year, I wrote a post called ‘Data, Equality and Insurance’, about a small survey that I’d undertaken into[...]
Reporting damage not being claiming for – is it really worth the loss of trust?
Should policyholders be obliged to report incidents to their insurer, even if they’re not claiming for them? And how fair[...]
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[...]
Is there such a thing as a bad insurance product?
It’s not difficult to think of insurance products that have hit the headlines for all the wrong reasons. Yet does[...]
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[...]
Data, Equality and Insurance: a small survey
The insurance market is entering a new phase, in which underwriting and claims practices are being transformed through access to[...]
How ethical is intermediation?
Is intermediation ethical? This was a question put to me at a recent insurance event I was speaking at. It’s[...]
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[...]
Why the pensions sector must address issues around big data – pt4
The pensions sector has a lot on its cards at the moment. Ethics may not appear to be a priority,[...]
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[...]
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[...]
How a risk wheel could improve policyholder choice
The UK financial services regulator and the trade body for the UK insurance industry are negotiating a set of rules[...]
Conflicts of interest: a challenge for more than just insurance brokers
Conflicts of interest have been in the ‘insurance news’ a lot recently, chiefly because of the UK regulator’s review of[...]
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[...]
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,[...]
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[...]
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[...]
The NHS treatment records – what can insurers learn from this event?
News that the UK’s National Health Service (NHS) released 47 million patients records to an actuarial society has caused a[...]
Who is the fairest of them all? How to use fairness to weigh up choices. pt2
If, as the UK regulator emphasised recently, fairness is to be the dominant theme of 21st century financial services, how[...]
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?
Long term insurance: genetics and the drift towards personalisation – pt2
Add genetics and personalisation to trends in medical devices, big data and predictive analytics and all sorts of ethical implications could arise
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.
How to avoid crashing your ethics metrics in 2014
As many of us approach a new business year, make sure the metrics you're going to be using for ethics deliver the insight your firm needs.
Conflicts of interest – are you ready for 2014? It’ll be busy!
Conflicts of interest look to be the big ethical risk for insurance firms in 2014. How are your firm's being handled? Here are 8 steps to get you started.
Three warning signs that a firm is struggling with its ethical ‘tone from the top’
Delivering an ethical 'tone from the top' can be a challenge at times for some business leaders. So what are some warning signs to look out for?
Will Conflicts of Interest be the Achilles’ Heel of Life Insurers?
Incentives and suitability are two ethical issues that life insurers share with a recent judgment and colossal fine in the US. Here's why the life market needs to act.
Insurance, data and a politician – a cautionary tale about privacy
How one insurance organisation got into hot water when it released claimant data that it thought had been suitably anonymised.
Ethics training: rounding off 2013 and planning for 2014
People working in the UK insurance sector are wanting more training on ethics and the ethical issues that matter most to their work. How can firms respond?
Ethics and Underwriting – Part 5 – social value and why insurance has become so relied upon.
Does an insurance policy have to deliver social value? It's a question that is somewhat broad, but also quite central to the role of insurance today.
Ethics and Underwriting – Part 4 – will client information be the next great challenge?
The way in which client information is obtained, and then used and protected, raises some of the most fundamental ethical questions for insurers
Ethics and Underwriting – Part3 – Fairness puts Distribution firmly onto the ethical radar
Underwriters need to look beyond product design and pricing for their ethical responsibilities, starting with their plans for its distribution.
Ethics and Underwriting – Part2 – the huge implications of pricing, pooling and differentiation
The way in which underwriters set premiums has huge ethical implications. I examine its two principal dimensions: pooling and differentiation.
Ethics and Underwriting – Pt1 – how the policy is designed really matters.
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.
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?
How watertight is the Flood Insurance agreement for consumers?
The new agreement on flood insurance in the UK is a step in the right direction, but it does raise several questions as to its fairness.
It’s good to talk – using ethical dilemmas as part of your training programme
Encouraging staff to talk about their firm’s values is one big gain from using ethical dilemmas in training, but there are other gains of much wider impact for the business.
The new uncertainties that anonymised data will introduce
How insurers use anonymised data has clear ethical implications, as well as risks that could trap the unwary and lead markets astray.
The ethical minefield that is anonymised data
The way in which insurers handle anonymised data can raise all sorts of ethical questions, with implications for policyholders, underwriters and regulators
Insurers need to understand young people more
Understanding more about how young people view privacy and identity will help insurers develop better and more trusted products.
Do personalised premiums mean the end of risk pooling?
"With insurance no longer a matter of risk pooling, policyholders pay a fairer premium". Is this really the case, and if so, what are the implications for insurance?
Getting serious about assessing your firm’s ethical risks
A structured approach to assessing ethical risk that recognises market, firm and employee driven issues will help you focus more on underlying causes.
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?
Pitfalls to avoid when measuring ethics
Measuring ethics is tricky, but necessary. Here are some of the pitfalls that measuring ethics can encounter, during the design, implementation and use phases.
What are the ethical issues raised by dual pricing?
Insurers are often in the spotlight for their use of dual pricing. So what sort of ethical issues does it raise, and why should insurers do about them?
The fundamentals of an ethical information economy: thoughts about the future
Jaron Lanier's book raises some innovative questions that insurers should absorb when thinking about the long term implications of big data
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.
Ethical Dilemmas – challenging, interesting, important
It may be tempting to ‘learn as you go’ when next faced with an ethical dilemma to resolve. Here are three reasons why some preparation is worthwhile.
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?
Privacy and Consent: some examples for a proactive insurer
Insurers need to challenge engrained thinking about consent to reflect the new regulatory and reputational landscape. Here are some examples for a proactive insurer to get started with.
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, identification and the challenges insurers face
Identification could be the key privacy issue that insurers need to understand and take on board, for it raises challenges at the heart of how underwriting works.
Privacy, identification and the need to know: who decides?
As many firms accumulate data about us to build a competitive advantage, the question of their right to know versus our right to privacy comes to the fore.
Privacy and Identification – pt4 – we all like to put our best side forward
Identification is one of the key privacy issues that insurers need to attend to. It is however perhaps the most difficult one for them to get right. Here's why.
Be wary of jumping to easy assumptions about how people behave.
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.
Privacy and Secondary Use pt2: referral fees and slippery slopes
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.
Privacy and Secondary Use : pt1 : Context, consent and control
It's with secondary use that the UK insurance market has had most privacy problems in the last year or two. The first of two posts explaining why.
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
Do the parts always add up? Privacy and Aggregation pt1
What privacy issues are policyholders most concerned about? In this short series, I begin with aggregation.
Should your premiums help fund your neighbours accidents?
Motor insurers have recently been criticised for allowing policyholders' premiums to be influenced by their neighbours' accidents. Is this unethical? The answer is obvious.
Insurance and the Privacy Controversy
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.
Are insurers and financial planners facing a ‘ napster moment’?
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.
A grim tale about motor insurance and ethics
This grim tale from the US motor insurance market should serve as a reminder that every decision made in business is in some way ethical.
Seven points that determine the fairness of flood insurance
The current debate about flood insurance brings together seven points that nicely crystallise around the central issue in the ethics of insurance.
Flood, fairness and risk assessment – pt3
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.
Flood, affordability and fairness – pt2
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.
How will insurers deliver on their promise of affordability for flood insurance?
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
Great to see launch of the Insurance Fraud Register, but …
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.
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
Social media and insurance – the rise of Anecdotal Underwriting?
The use of social media for underwriting raises several ethical issues, but for the moment, let's give this trend a name. Anecdotal underwriting seems appropriate. Here's why.
Four metrics that give ethical insight into telematics
Motor underwriters will be avalanched with data as telematics takes off, so what should they look for to gain insight into the ethical issues thrown up by this controversial technology?
Standards: something motor insurers shouldn’t gamble with
Telematics is throwing up all sorts of ethical questions at the moment. The latest one is around standards. It's something insurers shouldn't risk a gamble with.
Can you ever get enough risk data from Telematics?
How much can we expect from telematics? Some huge claims are being made for it, but a short cast back in history shows why expectations need to be cooled.
To thrive, telematics has to address consent
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.
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.
How wide the Code?
Should a code of ethics refer to sustainability issues like the environment and supply chains? It can get a bit complicated...
Arms and the underwriter
It's not often that I applaud a decision by an insurer to cancel cover mid-term without hearing the policyholder's side of the story first, but here's one case where it seems deserved.
Telematics – pt3 – fairness
If insurers become the lead provider of telematics technology, then spin-off services could produce all sorts of unintended consequences, particularly around the public's view of fairness.
Telematics – pt2 – the ethical upside
Telematics certainly raises some ethical concerns, particularly around privacy. It does however have an important ethical upside.
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 referral fees
Those involved with the introduction and scaling up of telematics would do well to study the OFT report on motor insurance, due to be released shortly.
Ethics and Fraud – pt2
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.
Ethics and Fraud – pt1
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.
More on Insurance Fraud
A delay in the launch of the Insurance Fraud Register should allow time for some key issues to be resolved. Heading up that list is consumer representation on its governing body.
Revolutionary Insurance
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.
Assumptions about flood
Are insurers living up to their side of the agreement on providing flood insurance? The use of assumptions in household insurance websites put it into doubt. It may even amount to flood de-risking.
Dangerous add-ons
Those selling insurance add-ons need to remember the lessons from payment protection insurance. This policy has its opt-out so hidden that it deserves investigation by the regulator.
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.
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.
More on the new Bill
Insurers will have to be more careful about what they ask personal lines proposers if this amendment to the new Bill succeeds.
Adieu utmost good faith
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.
Executive responsibilies
There are clear lessons for insurers from LBG's bonus clawback in relation to PPI misselling
What is ‘proven’ fraud
The Insurance Fraud Register will be a national database of 'proven fraudsters'. So what is meant by proven and who decides that?
Informed consent
Does informed consent apply to insurance? How much should insureds know about what the insurer gets up to after the declaration has been signed?
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.
Corporate Litigation Funding
Do senior directors in the insurance market understand what conflicts of interest really are? There are lessons to be learnt from Allianz's venture into corporate litigation funding.
Motor insurance fronting
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.
Bribery – the big risk for insurers
The Bribe Payers Index highlights the risks insurers face from bribery on construction projects
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.
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[...]
Ethical Underwriting – Part 4
I ended the previous post in this series by asking why there seems to be little direct evidence of ethical[...]
Ethical Underwriting – Part 3
The previous two posts in this series about ethical underwriting looked at moral hazard and the use of ethical indicators[...]
Ethical Underwriting – Part 2
This is the second of three (it may become four) posts that will explore ethical underwriting. The first post looked[...]
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[...]
Ethical Underwriting – Part 1
This is the first of three posts that will explore ethical underwriting. It's a term one rarely comes across in[...]
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[...]
Information exchange
The increased attention being given to insurance fraud has led to calls for greater exchange of information between companies in[...]
Refusing Cover
It’s a big step for an insurer to stop quoting motor new business in a particular part of the country.[...]