Eric Galbraith is ready to 'shake the tree' for the good of the industry

Every time I see reference to, or get involved in contributing to an article or discussion called “a view from the top” it reminds me of the old adage that a company is like a tree full of monkeys – with those at the top looking down on smiling faces and those at the bottom looking up and seeing mostly a***holes.

I should imagine that is how many in the banking industry are feeling, particularly those in the retail sector as they look at investment bankers. The public has tarred those working in retail with the same brush as their more highly rewarded and fêted investment banking colleagues despite the majority of them never having gone within a million miles of the exotic transactions which brought the global financial market to its knees.

Guilt by association is difficult to shake. Unfortunately, it is something that the insurance industry faces in these turbulent times. Insurers and brokers are part of the financial services industry, we have dealings with banks and we sell products that not are always readily understandable for profit, so Q.E.D. in the eyes of the public we must be guilty. Sadly, that is a perception I encounter not only when meeting members of the public, but on occasion regulators and politicians too.

The insurance industry needs to put some clear water between itself and the banking sector. The problems besetting the global financial system are not of the insurance industry’s making. Getting policymakers and regulators to understand that we must not be lumped together with the banks would be a starting point in rebuilding trust in our industry. The next is to divide our sector up even further and give recognition to the professional insurance broker, whose main business is general insurance intermediation and not a secondary ‘sale’ activity, as a distinct entity.

Dare I suggest that lending institutions should not be allowed to sell general insurance? Extremely unlikely to happen I know, but that would be great.

Dare I also suggest that regulators and policymakers take a look at where the problems in the general insurance market have arisen? The Financial Services Compensation Scheme’s rapidly burgeoning levy on general insurance intermediaries for the collapse of a number of firms selling payment protection insurance is a case in point. Many of the intermediary firms having to meet this levy have never sold PPI – kept out from this market by the lending institutions.

We as an industry need to move into the space left by others and rebuild trust, integrity and professionalism. It is important that there at the top of our industry, our leaders, demonstrate the correct values. I hope that I am speaking to the converted on this, but I want these words turned into action. Anyone can underwrite in a soft market, while in a hard market any broker can make good money.

I do not want the public to look at the insurance industry and think monkey business. Rather, I want them to see a highly-respected, easily accessible source of trusted advice. I want the insurance industry to be perceived as a profession that has raised and maintains high ethical standards. Regulation should only be a small part of this; we should have our own broker standards.

Change is in the air, however. Government and regulators around the world are looking at financial reform and our sector needs to get its views known. The CII’s professionalism taskforce will soon be publishing its proposals for the GI sector. Biba is at the table and you can guarantee that there will be no monkeying around - not while the stakes are so high.