Professionalism? Show them the benefits

By Stephen Lark

The unprofessional few will not change their ways until the CII and regulators can provide tangible incentives

Professionalism is a real buzz word in the insurance world at the moment, and the concept of increasing it across the industry is one that I am sure that everyone supports. Of course, the vast majority of the general insurance players conduct their business in a very professional manner with client service and advice being at the top of the list of priorities.

There will, however, be the occasional exceptions to this, and the recent Insurance Times article about the banning and fining of five individuals for insurance fraud is a reminder of this (‘FSA ban five following insurance fraud probe’, 12 August). All true insurance professionals should congratulate the FSA on exposing these people and dealing with them, as actions such as accepting premium and never incepting policies brings deep shame to the whole industry.

The FSA has banned 14 individuals to date this year for failings relating to insurance. The high-profile cases give us some of the worst examples of unprofessional behaviour. But there are also other practices that we recognise as unprofessional, some of which have being happening for many years.

Many of these are lucrative, or have become almost accepted as standard market practice, and so are especially difficult to stamp out. They do bring the profession into disrepute in the minds of clients, however, and it shouldn’t then be a surprise that many people don’t hold brokers and insurers in the highest regard when it comes to professionalism.

I don’t think that the general insurance sector has yet got the right structures in place to really make an impact on improving professionalism. There’s no doubt been an effort to raise the profile of professionalism, and it’s easy for the vast majority of people working in the business to shout a loud ‘here, here’ and then get on with doing what they were before.

The Chartered Insurance Institute have been setting the agenda, but I suspect that the various titles and awards, such as chartered individuals, chartered firms and the Aldermanbury Declaration have caused some confusion amongst both brokers and insurers about which route to follow.

Increasing the degree of co-operation between the CII, trade associations and the regulator on professionalism would be hugely positive. If companies could see that by obtaining a badge of professionalism it led to advantages in dealing with the FSA, for example a lighter touch on compliance or reduced fees, then attaining these awards would be seen to have a tangible guaranteed reward.

Without such an approach, the professional firms and people will just carry on being professional, while the small number of people who exhibit unprofessional behaviours will also just carry on for as long as they can without being detected, and do untold damage to the whole sector.

One of the recent bans imposed by the FSA came as a result of a whistleblower, and this just goes to demonstrate how important an element of self-regulation is. The whole industry needs to sign up to the concept of professionalism, and commit to ethical behaviour, and to help the regulator to prevent and drive out fraud and all unprofessional action. With real commitment from us all to a concerted effort to improve professionalism, we have a chance to change things for the better. The improvements needed cannot be driven by the regulator alone. IT

Stephen Lark is managing director of Lark Insurance

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