Nov 21, 2018 3 min read

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

New accountability regulations are turning the minds of insurance people to how much they actually know about integrity and ethics. On the face of it, the actions required seem simple – run some ethics training and integrity assessments, record the results and get back to work. This might please compliance providers, but it’s going to have little to no impact on regulated firms. They’re evidencing the wrong thing. In this post, I outline how insurance firms need to think differently, and carefully.

Ethics training and integrity assessments have to address the right problem. Remember that regulators are actually not that bothered about whether you run ethics training and/or integrity assessments. What regulators are bothered about are the capabilities of insurance people to make decisions that deliver the types of outcomes for consumers that those regulators are looking for.

In other words, the outputs to deliver the right outcomes. Sure, have ethics training and integrity assessments as inputs to that process. However, only do so if they’re addressing the right problem.

The Importance of Focus

Even then, it could still be a waste of time and money if your ethics training and integrity assessments were just focused on how to make more ethical decisions. Don’t get me wrong – I help insurance people learn about ethical decisions, but at the same time, I push clients to be more focused. Three questions cover this:

a) what are the ethical challenges your people face?

b) what are the things that are creating those challenges?

c) for which of those things is ethics training the best solution?

It’s not always easy for insurance firms to address these questions. It can be difficult for a firm to be honest about the challenges their people face in making decisions that are more ethical. I’ve facilitated some pretty animated discussions about what those challenges really are, and how the firm can respond to them.

Two Stories with Different Outcomes

And some firms have backed away. For example, the firm who wanted to include ethics in their leadership programme, but didn’t want to reference their main ethical challenge (conflicts of interest). This wasted a lot of time and money on training that had little impact on their people’s day to day work. Back at their desks the next day, those managers would have faced the same ethical challenges, about which their training had taught them little that was tangible.

In contrast, there was the insurer interested in their claims people making fairer decisions. Of course ethics training would have taught them a lot of things about fairness, but actually to little effect. The problem was found not in what they knew about fairness, but in the inflexibility of their ‘support’ systems. It was systems and procedures that penalised them for straying from the straight and narrow. And the solution lay not in training, but in adapting those systems, and associated HR systems as well, so as to allow those customer-facing claims people some leeway in the decisions they wanted to make on claims.

Ethics training should fix ethics problems. Integrity assessments should weigh up how skilled and committed people are to deliver those fixes.

Steps to Take Now

‘Yeah, well’, you might say: ‘That’s all very well, but we’ve got jobs to get on with.’ And of course insurance people having lots to juggle with. However, some of that busy schedule will come from having not delivered relevant and targeted ethics training in the past. Think of retail general pricing, or delegated authority, as two examples. Both are consuming much senior and middle management attention, yet both could have been largely avoided if the necessary steps had been taken earlier on.

So what are those steps? Well, in outline, they involve undertaking an assessment of ethical risks, as set out in this free guide. Then for those risks you prioritise, it’s about mapping both the downstream impacts and the upstream influences. And then, for each of those influences, you ask what will change them for the better. Ethics training might address some of them, but rarely all of them, and usually not on its own.

A fairly standard process you might think, yet some firms can struggle to achieve results. That’s often down to them just not being able to see some of the ethical risks that outside people think should be staring them in the face. They’re just too close to them, in an everyday, ‘working as usual’ type way. That’s where it’s important to have someone in that process who can bring the eye of a ‘critical friend’ to the review as it takes shape and delivers choices.

In next week’s post, I’m going to be examining the use of integrity assessments.

Duncan Minty
Duncan Minty
Duncan has been researching and writing about ethics in insurance for over 20 years. As a Chartered Insurance Practitioner, he combines market knowledge with a strong and independent radar on ethics.
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