Jul 25, 2023 8 min read

Free Guide : Ethical Decision Making

Insurance is full of good people. I’ve worked with lots of them, and learnt from them too. At the same time though, I’ve also come across some pretty poor decisions in my time. Some of them were real eyebrow raisers, while others were just plain puzzling.

ethical decision making
The dinner table - a key test for the ethics of a decision

What we have then in insurance, like most other business sectors, are lots of good people, but at times some questionable decisions. This reflects what researchers have found, that most misconduct in corporate settings is not down to ‘bad apples’, but down to good people making poor decisions.

This is not something that the sector can treat as if it was in some natural consequence of a competitive market. Insurance is too important for that. So what can we do about it?

Ethical decision making offers a way for people to deal with such situations. Just as poor decisions won’t just go away, ethical decision making isn’t something that will just happen on its own. We have to work at it, by following core ideas and drawing on particular skills. That’s what this free guide brings together for you.

No Philosophy Here

Let’s start by addressing a few questions that people can raise about ethical decision making. One is: why bother when the sector is so regulated? Well, regulations are increasingly being written in ways that require judgement – take fairness for example. And regulators expect you to work out how to make those judgements yourself.

Another question is ‘what exactly is ethical?’ There’s lots of philosophy textbooks on this, but this guide doesn’t go that way. The focus here is on the practical side, providing you with an understanding of ‘how to make’ ethical decisions. In particular, it shows you how to make the all important step from ‘thinking about ethics’ to ‘actually using ethics’ in the decisions you make as part of your everyday work.

A final question is ‘should I impose my ethical views on others’? There can of course be differences in what any two people feel is ethical and that’s to be expected. There are also a great many more similarities in what those same two people feel is ethical. The key point is: just because you may not agree on absolutely everything about what makes something ethical, it doesn’t mean that you can’t then focus on the huge overlap in what you do agree on.

Reasons to be Ethical

Take these two statistics from a survey of insurance executives a few years ago.

  • 28% of insurance CEOs are “extremely concerned” that trust will affect their firm’s growth;
  • 72% of insurance CEOs think it is harder to sustain trust in a digitised market.

Trust therefore matters, but how do you deliver it? After all, you can’t ‘do trust’ – that’s what customers give you. What you need to do is build your firm’s trustworthiness. And one of the key ingredients of trustworthiness is capabilities. In other words, having people with the knowledge and skills to make trustworthy decisions. That’s what this guide is about.

You can see how in the last year or two, there’s been a big rise in insurance people talking about data ethics. That’s because insurance CEO’s have drawn a line connecting ‘growth to digital strategy to trust’. This guide shows them how to take the next step and move from drawing lines to putting it into practice.

Whose Ethics First?

You may think that you should base your ethical decision making on the code of ethics of your firm or professional body. The problem is that these usually tell you where they want you to get to, but not how you can get started. So instead, I’m going to suggest you base your ethical decision making around your own personal values. Here’s why..

  • there’s a big overlap between your own values and those of your firm or professional body;
  • you’re familiar with them – you don’t need to look anything up;
  • you’ve used them before – that practical experience is important;
  • they mean something to you, so you’re going to be pretty motivated to put them to use.

So what are your personal values? Most people haven’t a list of them! I’m going to suggest that you start by focussing on three common values: fairness, honesty and respect. They are values that virtually all of us share.

Getting Started

The best way to take a first step in ethical decision making is to use those three personal values to raise a question, to ask someone to explain what they’re doing. So for example, you could ask...

  • an underwriter whether their pricing idea is going to be fair;
  • a broker whether they’re being as honest as they could be about this placement;
  • a claims person whether the settlement calculation is as fair as they may think;
  • a counter fraud person whether their investigation is respecting the claimant’s rights
  • a marketing person whether their PR campaign really is as honest as they make out.

What you’re doing here are two things. You’re moving from ‘thinking about ethics’ to ‘asking about ethics’ and this is a hugely important step to take on the road to ‘doing ethics’. And you’re nudging that person in a ‘can we not do better here’ way.

What you’re not doing is saying that they’re wrong or a bad person. You’re simply asking them to explain themselves. This then opens up a discussion, about whether it could be done better, and if not, why not.

Setting Expectations

The obvious question this then raises is ‘how much better’. Or to put it another way, how far are we expected to take our ethical decision making. It’s important to frame those first steps in ethical decision making around notions of doing better, rather than being perfect. Perfect’ means measuring ourselves against an unattainable yardstick, while ‘better’ means setting a direction of travel and holding ourselves to it.

What better also means is that we may not get it right every time, but our intention should be that we try to be better at the ethical side of our decisions all the time. And when we don’t get it right on a particular occasion, we should learn from that, in order to be better at it next time round.

How Often is it Needed?

How often should we expect to bring ethics into our decisions? A couple of times a week, or several times every day? The answer lies in the work we do and those three personal values we talked about earlier: honesty, fairness and respect. We should ask ourselves…

  • Who am I to be honest with?
  • Who am I to be fair with?
  • Who should I be respectful to?

And if you think about how the insurance market works, the answers to those questions are customers and your work colleagues. As so much of our everyday work involves interacting with customers and with work colleagues, it’s clear that there are many decisions that we face every day that could have an ethical side to them. It’s common, not rare.

What to Focus On

We’ve talked about starting with a question, and about those three personal values – fairness, honesty and respect. To help further with ‘getting started’, I want you to focus on something that fits these criteria...

  • which of those three personal values really motivates you the most? People find their voice when talking about something that really matters to them.
  • how do you prefer to handle a situation? Some people like to openly raise a challenge, while others like to ask questions in a more ‘behind the scenes’ way.

So someone might prefer to quietly raise a question about respect with colleagues they trust, building support before making their next step. Others like to get up on the table and shout ‘that is not fair’. Use what you know of yourself to make those choices, for if they’re choices you’ve made (rather than made for you), you’re more likely to use them. Remember – it’s all about moving from ‘thinking’ to ‘asking’ to ‘doing’.

Three Skills to Start With

To take that next step of moving from ‘asking’ to ‘doing’, use one or more of these three skills. They are very practical skills that have been around for some time.

Skill No. 1 : the ‘dinner table test’. Think about how the decision you’re about to make would sound if you were to explain it to family and friends over a dinner table. How would they judge the fairness, honesty, respect of what you’re about to do? Use that feedback to shape how you deal with the decision in front of you.

A variation of this is the ‘Financial Times test’. How would you feel if you saw the decision you’re about to make featured on the front page of a leading newspaper? Again, factor that into how you handle the decision in front of you.

Skills No. 2: the ‘Revered Perspective’. Think about how the choice before you would look from the perspective of someone you’ve always admired and looked up to, but probably never met. And then ask yourself: what do I think they would do in my shoes? How would they approach the ethics of this decision?

Skill No. 3 : the ‘Two Distinct Voices’. Describe the choice before you using two very distinct voices, one emphasising the ethical side, the other ignoring it. Make both of those voices realistic, but with no half measures. Research shows that you’ll end up feeling more confident making the ethical choice when it is clearly juxtaposed against the unethical choice.

These skills are helping you do two things. One is to open up the situation to other opinions, by making you think about how other people would see it. The other thing they do is to help you see beyond the immediate situation and recognising the longer term consequences of a decision.

Five More Skills

Skill No. 4 : ‘Formulating Your Commitment’. This involves mapping out in advance the difficult decision you might soon face and then identifying the ethical choice you want to make. What you then do is work out the best way of making sure that you can make that ethical choice the next time round.

Skill No. 5 : the ‘Critical Friend’. This involves talking through a tricky situation with a colleague at work, someone whose opinion you trust. Opening up your thinking to some critical but well meaning feedback can show you where you might be at risk of taking a wrong turn.

Skill No. 6 : ‘Clarity of Language’. You’ll find that decisions in which the ethical side has been ignored often use language that dilutes or diminishes that ethical dimension. You should watch for this and be prepared to ask them to clarify what exactly they’re saying.

Skill No. 7 : the ‘Four Eyes’ test. This is a simple technique used in humanitarian relief organisations and involves decisions with a strong ethical dimension only being taken after approval by two separate people.

Skill No. 8 : Practice. It’s important to keep on practicing these skills in everyday work situations, by making simple observations about the ethics of something, by raising simple questions, by pointing out simple options.

Dealing with Rationalisations

We’re just as likely to be on the outside of an ethical situation looking in, as we are to be on the inside of that situation handling it ourselves. This means you may hear colleagues making excuses for not addressing the obvious ethical side to a decision. These are called ‘rationalisations’. Let’s look at five ways in which good people typically try to rationalise a bad choice.

  • there are people who deny responsibility – they say things like “I had no choice! There was no other option.”
  • there are people who deny there’ll be any loss, saying things like “No one will really be worse off. And, who are these people anyway?”
  • and then there’s the people who try to appeal to other loyalties – “the company expects this from me”
  • then there’s the claim to entitlement – “I’ve worked hard on this deal; I deserve to win it”
  • and probably the most popular one, sometimes called the five most dangerous words in business – “Everyone else is doing it”.

When you hear these statements like these, you should be prepared to respond to your colleague, asking them to explain themselves, asking them to think again, perhaps even challenging them about the ethics of their decision.


There are solid business reasons for learning how to bring ethics into your business decisions.

Use your long held personal values to start bringing ethics in. And do so by asking questions, around issues that particularly interest you.

Aim to get better at this – don’t worry if you’re not perfect. ‘Better’ means setting a direction of travel and holding ourselves to it.

Use ethical decision making skills to bring in other people’s perspectives and to reduce the pressure to make a quick decision.

Then use further skills to get feedback on your options and move towards the best way forward.

Watch out for rationalisations. These are excuses for bad decisions. Be prepared to challenge them.

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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