Career Skills Development: The Ethical Effect
By Carrie Burns, Marketing Communications Manager, ISCS

Only make promises that you can keep, fulfill all promises you make or explain why they cannot be fulfilled, disclose bad news in a timely manner, disclose unavoidable conflicts of interest – do you do all of these? While they don’t seem insurance-specific, these are some examples of ethical behavior listed in the International Risk Management Institute’s (IRMI) paper, “Ethics Considerations for Property& Casualty Insurance Professionals.”

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Poor ethical behavior can and have had disastrous effects on individuals, companies and the industry as a whole. The property/casualty insurance industry has seen its share of high-profile ethics-related issues in recent times, according to IRMI. This poor image has been documented again and again in public opinion surveys.

According to EY’s “Global Consumer Insurance Survey 2014,” Global consumers trust the insurance industry less than they trust banking, supermarket, car manufacturing and online shopping.

In its paper, IRMI offers some reasons for the insurance industry’s poor public image:

  • The industry goes through soft and hard market cycles of cutthroat price wars and seemingly unsupportable price hikes. There are often no logical reasons supporting these cycles, though many excuses are given at the time they occur.
  • The very nature of the product requires the industry to interact with people in times of grief, loss, and stress. Sometimes more bad news must be delivered—such as a coverage denial, reduced claim payment, or coinsurance penalty—which causes resentment.
  • In some cases, management focuses on short-term gains designed to create immediate stock value, rather than looking longer term. Downsizing has resulted in insurance company offices being further from the agent and customer, thus losing the sense of trust that once existed.
  • Many insurers, as an economic measure, have cut back on training programs for employees. Many stopped bringing new people into the business many years ago. This is starting to create a shortage of qualified middle managers with strong insurance backgrounds.
  • In some cases, downsizing has resulted in an inability to provide quality service to agents and insureds.
  • The industry does a poor job communicating with insureds about the purpose of insurance and the factors that go into underwriting and marketing decisions.

Ultimately, IRMI says, an industry-wide commitment of this type is probably the only way to overcome the poor reputation the industry faces.

It can start with you. Join us on Tuesday, June 14 from 3:30 pm to 5 pm at IASA’s Annual Educational Conference & Business Show in San Antonio, Texas, for the session “Ethics and Challenges of Leading.” This session will focus on the challenges our industry faces from an ethics position. Common challenges include trying to balance profitability vs. policyholder needs and the pressures leaders and team members will face in dealing with the day to day business of insurance. The presenters will layer on the changing work environment, the way different generations work most effectively and their expectations and challenge the conventional wisdom of what "good" looks like to the next generation.

Attendees will be able to develop a common/simplistic framework by which ethics can be judged, understand the challenges insurers face daily with ethical decision making at a leadership level and look at generational work perspectives and determine if those drive differing ethical viewpoints.

Carrie Burns