With public disapproval of the insurance industry well-established, reputation has become precious. So the CII's Sandy Scott says measures to bolster it should be at the top of every company's agenda
Reputation takes a lifetime to build and a moment to destroy. Think Andersen. Think Enron. Think how some of the best-respected names in the UK have become bywords for mismanagement, incompetence or worse. And note how there is no way back. Companies that lose their reputation, lose everything.
But for insurance and financial services professionals, there is more to worry about than their company's reputation. To say our industry is not held in the highest esteem is an understatement. We owe estate agents and journalists a hefty vote of thanks for keeping us off the very lowest rungs of public opinion.
Generally, there is a growing realisation of the importance of reputation. When blue-chip businesses were polled in the mid-1990s on their priorities, `reputation risk management' came sixth. In 2001, it came top. The message is clear: each company or organisation needs to establish, promote and defend its own reputation. But, I believe, we must collaborate to enhance the reputation of the industry as a whole.
A measure of the significance of this issue is that reputation is one of the two main themes of the UK Insurance and Financial Services Conference, which will be hosted by the Chartered Insurance Institute (CII) at the Birmingham ICC on 26 and 27 September. The other is regulation.
So what can be done to cement and consolidate collective reputation in our industry? First, take it seriously. In many individual companies this is happening with management procedures and sub-committees dedicated to the subject of protecting the reputations of those individual companies . But what of the collective reputation of insurance and financial services?
Being in the business of risk, it's probably not feasible to avoid the very occasional catastrophic corporate failure. The Financial Services Authority (FSA) has also made it clear that regulation cannot prevent this remote possibility. And yet the industry can be proud of its response to the increasing incidence of natural and man-made catastrophes. Last year, for example, we had the 11 September tragedy, the loss of the Petrobas oil rig, the Toulouse explosion and the Sri Lankan airport attack, not to mention floods nearer home.
Many fine initiatives such as the Association of British Insurers (ABI) Claims Code, PPIAB and the Raising Standards Initiative tackle aspects of our collective reputation, but the industry has no obvious overarching approach or strategy for tackling reputational issues. Perhaps one will emerge from the CII conference.
Unless it does, we will continue to serve as the whipping boy of the consumer press, which still regards us as "commission-hungry salesmen" and which delights in portraying our industry as essentially corrupt and self-serving.
This leads on to the threat that we will lose our appeal to the financial markets. Now more than ever, we need to attract capital. And if we are seen as social and corporate pariahs, we are not going to attract the new blood we need to sustain and expand our sector.
While we all think about the best approach to regulation, it's time to put reputation at the top of the industry's agenda.