Steve White says the insurance sector needs to deliver business or 'soft skills' training for intermediaries and their staff
Personal development and training are matters that have been on most intermediaries' radars at least since the launch of the GISC. However, with the anniversary of statutory regulation and the FSA's current thematic review of training and competence, the subject is more clearly in focus than ever before.
Before considering the challenges and solutions, let's remind ourselves of the regulatory background.
All firms that are authorised and regulated by the FSA have to comply with the requirements of the Training and Competence sourcebook.
This contains two chapters:
Chapter one sets out the commitments each firm has in relation to training.
These are:
- Employees should be competent
- They should remain competent for the work they do
- They should be appropriately supervised
- They should have their competence regularly reviewed
- The competence should be appropriate to the nature of the business.
The commitments are guidance only and do not prescribe how firms should go about complying.
Chapter two sets out prescribed rules in respect of recruitment, supervision and the attaining and maintaining of competence.
However, in the insurance sector, the rules in chapter two only apply in respect of those staff who engage in advised sales with retail customers.
For those firms who have never previously had their own training and competence programme, the accepted industry wisdom is that the process contains four parts:
1. Each job within the business has a written job description prepared.
2. From the job description, the key competencies are established, For example, a motor telesales clerk's key competencies might be: an understanding of motor insurance; sales skills; customer care skills; and knowledge of sales processes.
3. Each staff member's performance is then regularly reviewed against these key competencies.
4. Where the measurement shows a deficiency, appropriate training can be provided.
Issues
As a sector, we have developed a sound reputation for technical training, with the CII, Biba and insurers being the most popular providers for intermediaries and their staff.
However, we do not yet have any significant reputation for delivering training on business or 'soft' skills.
The example of the key competencies needed by a motor telesales clerk highlights the problem. Of the four key competencies identified, the sector is recognised as being a good training provider for just one of them.
Intermediaries are now all automatically subject to the compulsory jurisdiction of the Financial Ombudsman Service (FOS). Each firm gets two free cases per year, with all other cases referred to the ombudsman costing the firm £350 each.
The FOS charges will lead firms to scrutinise their complaints logs to find the root causes of complaints.
Having spoken to a number of larger personal lines intermediaries about their complaints analysis, a clear pattern of complaints cause can be seen. For every complaint generated by a deficiency in technical knowledge, there are many more arising from causes of a 'business' or 'soft-skill' nature.
Once firms undertake their complaints review, coupled with the threat of a £350-per-time ombudsman fee, it is likely the demand for soft skills training will increase.
Firms accessing business skills training for the first time could be confused by the plethora of courses and providers available. Recognising this problem, Biba is creating a training package of key soft skills.
The model will include training on basic business skills such as communication, negotiation, listening and teamwork.
Most firms will recognise that these skills form part of the necessary key competencies for the majority of intermediary job roles. Biba is encouraging its members to ensure staff are competent across the range of required skills and knowledge.
Gap analysis
There are many training providers. Most intermediaries have strict budgetary controls over their training spend and exercise careful judgment on who they use to provide training.
Many intermediaries will be undertaking training and competence gap analysis exercises for the first time and seeking training provision.
These firms are likely to consider the brands they trust when sourcing training.
It is likely that the FSA's interests in conflicts, treating customers fairly and inducements will result in the current format of training offered by insurers becoming inappropriate.
Surveys have shown that Biba and the CII are among the most popular training providers to the intermediary sector. They have been working closely for a while now in the provision of training and related support.
Biba's 2005 regional training programme was jointly branded with the CII; the Faculty of Insurance Broking and Biba jointly brand Masterclasses; and Biba and the CII have developed the co-ordinated range of online learning and assessment tools, Broker ASSESS. Biba and the CII are keen to explore how this co-ordinated approach to training will develop.
- Steve White is regulation and compliance manager at Biba.
