Oct 14, 2021 4 min read

Six ethical issues that insurers need to build into their plans for 2022

In preparing their plans for 2022, insurers are making a series of fine judgements about the ethical risks that need attention. Here are six areas to which I'm proposing serious attention needs to be given.

In preparing their plans for 2022, insurers are making a series of fine judgements about the ethical risks that need attention. Given the issues circulating around the sector, the watchwords for this need to be transparency and honesty. Transparency, in terms of “is what we know good enough in scope and depth to get those judgements right?” And honesty, in terms of “are we challenging ourselves enough about what it tells us?” Here are six areas in which those questions need to be asked with particular care.

Ethical Decision Making

A lot of people focus on the IDD requirement to equip people with the ‘minimum necessary knowledge of business ethics standards’. What they often forget to pick up is the later reference to the employee possessing the ability to apply that knowledge. So the IDD is just as much about skills as it is about knowledge.

This makes sense, given that knowledge is of little value without the skills to apply it. So what firms have to demonstrate is that they have been teaching their people the skills of ethical decision making. And such skills are rarely found in those business ethics standards. After all, those standards are about where you need to get to. The skills are about how you get there.

Your plans for 2022 need to show how you are equipping your employees with the skills of ethical decision making.

Three Lines of Defence

Most insurers have been working with three lines of defence for some time now. The arrangements feel organised and established. Yet over the last few years, the sector has been shaken by pricing issues that those three lines of defence really should have picked up on in their early stages.

To be honest, the pricing one was not difficult to spot – I was warning of a super-complaint eight months before it was delivered. I’ve also been clear about where I see the next big issue coming from, and I expect it to be much more reputationally disruptive than the pricing one.

My point is that such events point to the three lines of defence needing to be audited, reviewed, even challenged, from time to time. And I feel strongly that 2022 is the time to do that. From what I’ve reliably informed by the market, there are insurers out there for whom the results of such a review or audit should be eye-opening. Better to find this out within the firm, than the regulator have to point it out to you.


I can’t emphasise enough how important it is for insurers to gather the evidence to confirm how discrimination is being managed within the firm. This is not about employees – insurers are already done a lot of work on that. This is about customers and consumers, from the moment they start typing into a price comparison site, to the moment a settlement offer is made to them. Every function, without exception. Every system, without exception. It may seem like a big and rather difficult job, but the risk, this year or next, will be even more so.

Ethical Culture

Ethical culture will invariably be on most firm’s plans for 2022. One particular dimension that insurers should look carefully at is what is referred to as behavioural ethics. These are patterns of behaviour that people can adopt when confronted with a decision or scenario in which ethics plays a role. I’ve seen at times how these patterns can cause some aspect of a firm’s culture to steer teams or people quite radically off course. The broad issue here is that some of those patterns of behaviour can become normalised as ‘this is how we do things round here’, while at the same time masking ethical and compliance issues. If your culture work hasn’t addressed behavioural ethics yet, 2022 is the year to do so.

Data Ethics

There are one or two serious ethical storms ahead for UK insurers, and data and analytics are central to them. Several firms have already set a course on data ethics, but from what I’ve seen, these are tending to be the course the firm prefers, rather than the course the firm needs. The way in which data ethics issues are developing means that something more than just a data governance approach is needed. The radar needs to be tuned to pick up the subtle shifts in reputational positioning that long term users of AI now realise are required. As late’ish adopters of AI, insurers need to recognise and assess these shifts before they drift into a storm.  2022 is a good time to take stock of your course and adjust your sails for the storms ahead.

Digital Projects

As data ethics issues develop from concerns to controls, the challenge that insurers will face is how their management of digital projects (both emerging and implemented) can accommodate some quite radical changes. I’m seeing attitudes to some types of data changing quite noticeably over the past 12 months. And I’m seeing tolerances and significance levels being re-calibrated in ways not thought necessary before. What this adds up to is the need for your digital project and system management to be much more adaptive than in the past. 2022 is a good time to check this.

Summing Up

There is I think still time for insurers to build a reasonable position on the big ethical issues that loom ahead. The plans formed over the next few months for 2022 will be instrumental in securing that position.

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.
Great! You’ve successfully signed up.
Welcome back! You've successfully signed in.
You've successfully subscribed to Ethics and Insurance.
Your link has expired.
Success! Check your email for magic link to sign-in.
Success! Your billing info has been updated.
Your billing was not updated.