Lord Hunt says it's down to individuals to stand up for professionlism and act with integrity
T hose of us within the world of insurance have generally been very frank in acknowledging that our public image is not as positive as we might like. In recent years, however, we have become much less willing to tolerate the status quo - and far more willing to address the roots of the problem. Boosting our reputation will ensure our survival and success.
One popular misconception concerns "conflicts of interest". Those outside the industry are often confused about the relationships between different job roles and unclear regarding matters such as incentives and remuneration. Where ignorance and confusion abound, it's inevitable negative views will take root; and even if everything is above board, perception is extremely important.
The conflicts of interest issue is addressed in the CII's Code of Ethics & Conduct, which stipulates that all firms should have a relevant conflict management policy in place. It is beholden on senior management to set the cultural standards for their organisation. Corporate governance should be structured in such a way that conflicts are highlighted and resolved.
Individuals too have responsibilities. They need to ask whether their conduct is fair and ethical, as it affects both their employer and their customers - and by customers, of course, we mean both policyholders and intermediaries. There is a clear requirement to keep the best interests of all customers to the fore, with objectivity and honesty the watchwords.
Only by taking responsibility for our own actions will we enhance the standing of the industry as a whole. We need to see ourselves as others would see us and apply objective measures. Wherever necessary, we should seek guidance and support and we should take care always to retain our sense of balance, observing the proprieties without becoming obsessively risk-averse.
Everything is a matter of judgment within the context of professionalism and integrity, whether we are talking about remuneration or corporate hospitality. In other words, what matters is whether any incentive structure or corporate event can corrupt the integrity of the process by inducing to anyone to act in a way that is detrimental to a customer.
As an industry we should create a climate where it is understood that invitations are given and accepted without ulterior motive, expectation or obligation on either side. We must also accept the need for ever greater transparency about fees and remuneration. This is what the 'FSA model' is all about and I have recently been arguing for these principles to be applied even more widely, in particular to claims management companies.
Managers must constantly monitor behaviour and resolve problems as and when they arise. Ultimately this comes down to each individual resolving all and any conflicts of interest by acting at all times with unswerving integrity. We shall all enjoy the benefits if we do. IT
' David Hunt is chairman of the financial services division of Beachcroft Wansbroughs and also of the Professional Standards Board of the CII