Apr 25, 2023 3 min read

Revolutionising Fairness – the Starting Point


If insurers are to address fairness seriously, they must find a new way of engaging with those challenging them. There are hurdles to be removed first though, including one that I always hear mentioned. Unless dealt with, competition law could put a brake on revolutionising fairness.

You’ll recall that a detailed paper on fairness that I wrote for the Institute and Faculty of Actuaries was published in January this year. It explored how insurance should now be considered as a form of common good, like auditing and accounting. And it then looked at how something called a ‘common pool resource’ might act as a vehicle for finding a new ‘equality of fairness’ for the sector.

If there’s one thing that developing any form of new arrangement around something like fairness depends upon, it is that the various parties involved are able to sit down and together find a better way forward. And in so doing in relation to something like insurance, people giving me feedback invariably said that the one thing that would have to be dealt with is competition law.

Now, as you might guess, I am not a lawyer, nor do I have any great understanding of competition law, other than it stops anti-competitive conduct amongst firms in a sector. Sounds like a good idea. Yet at the same time, it is not a law that stops business sectors developing joint approaches to common problems.

Take the Insurance Fraud Bureau for example. It’s at the centre of the sector’s counter fraud initiative, and its work directly influences cover, premiums and claims. It hasn’t been closed down due to competition law concerns.

Then there’s the trade bodies and professional bodies – they regularly hold meetings to discuss current trends and possible futures in relation to all sorts of premium influencing activities. Those activities haven’t been closed down due to competition law concerns.

Not a Brick Wall

I don't see competition law as a brick wall for the sector’s engagement with those seeking fairer outcomes from insurance activities. I see it as more like a ‘go slow’ zone at the gates, designed to get people to think about what they’re doing and how they’re doing it.

In such situations, what really makes the difference is the will to push forward on something. I sometimes feel that the frequent emphasis and warnings about competition law indicate a lack of such willingness.

While in some ways that is sad, in other ways it is also rather natural. Taking on something as significant as fairness does need more than ordinary levels of willingness. Business as usual retains powerful attractions, if only in the short term.

In my fairness paper for the Actuaries, one particular point I emphasised was that I didn’t see it to be the regulator’s role to drive forward that engagement by the sector with those raising fairness challenges. That was because the willingness and drive to generate change out of such engagement should come from not one stakeholder, but many, if not all, of those involved.


I wonder now whether the regulator may perhaps have a role as a faciliator of the environment within which such engagement could begin. And by environment, and in the context of my earlier comments about competition law, I mean a ‘sense of negotiating space’ that allows competition law issues to be put aside and the real issues to be addressed.

So what, some of you might be thinking - surely they just need to get on with it. I’m not so sure. I’m reminded on the significant role played by the Norwegians in providing the ‘sense of negotiating space’ to bring some hugely challenging (but seemingly intractable) global issues to a constructive engagement.

Are there alternatives to the FCA? EIOPA is one possibility, although perhaps not for the UK market on its own. Then there’s the International Association of Insurance Supervisors, which is relatively distant to most UK insurers, which is good, but perhaps not used to engaging directly with insurers.

There might be some form of academic forum suitable for providing that ‘sense of negotiating space’ - a version of data science's Alan Turing Institute but for fairness. Unfortunately, most academics interested in insurance tend to work in small groups and may lack the time and capacity to handle long running negotiations. They would certainly have an input into whatever is arranged though.

There are organisations like the Geneva Association, but the interests of insurers hold too much sway there. And the reinsurance market, while interested in the long term, would be too insurer orientated to facilitate that space.

To Sum Up

While my paper sought to highlight fairness as a hugely important issue for the sector to deal with, I also sought to introduce ways in which that ‘deal with’ part could be facilitated. There’s no point in someone like me pointing out that the sector needs to deliver this mix or that level of fairness, without suggesting steps that could help them get there. The analogy I use is that of a ladder. Getting to the top of the fairness ladder needs well placed rungs that allow people to get off the ground and start climbing.

Dealing with competition law, and providing a ‘sense of negotiating space’ are two such rungs. Let’s talk about them now.

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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