What goes on in the mind of a claims handler really matters. In act, when it comes to the ethical culture of their firm, it can speak volumes. And the ear of the Financial Conduct Authority is starting to tune into the messages being sent out to claimants.
So why this interest by the FCA in the mindset of the claims handler? Surely they should be looking at the processes and policies the insurer has for their claims department. Well, their interest signals a rather insightful approach to examining the ethical culture of insurance firms. To understand why, we need to look at the three levels at which a firm’s culture operates.
The first level of a firm’s culture is that of its visible structures and processes. These can include corporate values, codes of ethics, statements about how the firm works and how the firm has organised itself to deliver all this.
The second level of ethical culture is that of the beliefs and values held up by the firm as markers of its distinctiveness and success. These will be what the staff have come to recognise as important to the firm and important to how they can get on in the firm.
The third level of ethical culture is that of its basic, underlying assumptions. These are the implicit assumptions that actually guide behaviour and that tell staff how to see, think about and respond to people and situations. They are so taken for granted that staff don’t questioning what they mean or why they have to be followed.
Let’s put these three levels together into a quick and simple example. If one of your firm’s values is teamwork, but everyone in sales knows that their bonus is decided by their position on a revenue league table, then the culture of that firm is likely to include an underlying assumption that bringing in sales is what really matters. Unless there are strong, countervailing assumptions about what is good practice in how this is to be achieved, then all sorts of ethical repercussions could arise.
The reason for the FCA’s interest in the mindset of claims handlers is to undercover any underlying assumptions that have ethical repercussions for claimants. While the ‘Treating Customers Fairly’ intiative concentrated on the structures and processes at the first level of a firm’s culture, this new initiative is seeking to get underneath all that and undercover what messages are really driving how claimants are treated.
One question the FCA may be seeking to answer is this: could the sector’s anti-fraud initiatives be introducing underlying assumptions into the mindsets of claims handlers that undermine the reasonable expectations of policyholders when they come to submit a claim. And if so, could this lead to regulatory interventions that seek to re-level that particular playing field.