In the midst of GISC turmoil, Mary Francis, director general of the Association of British Insurers, shifts focus to two other initiatives: the Claims Code and the Savings and Long-Term Risk project.
The official launch this week of the General Insurance Standards Council (GISC) is the first of three new initiatives coming up from the insurance industry this year – all of them designed to raise standards and increase consumer confidence in insurers and the service they offer.
The autumn will then see the launch of a general insurance Claims Code, as well as the birth of the Savings and Long-Term Risk project (SALTR) after a gestation period much longer than the usual nine months.
All three initiatives demonstrate the insurance industry's commitment to the very high standards necessary to raise consumer confidence and reverse the negative image it has acquired in some quarters.
And it's not just a question of boosting business. Yes, profitability is as key a motivator for insurers as for any other commercial organisation. But there is no better advert for insurance companies than customers who feel they are treated fairly and considerately when buying insurance and when making a claim.
As the safety net of state welfare draws ever tighter, consumers need to make financial planning a priority. We have a shared goal with government: to give people the confidence to provide for their future needs through insurance and savings.
These initiatives don't represent just an image makeover for insurers – and they are not just “spin.” Starting with GISC – which will simplify and improve the sale of non-life insurance products – the trio of launches will also see real and substantial changes to the quality and clarity of communications; the speed and efficiency of the aftercare insurers provided during claims handling; and the design and description of life and savings products.
I won't duplicate any of the vast number of articles you will no doubt be reading over the next couple of weeks by setting out what GISC will do and how it will work. But you have probably read much less about the Claims Code and SALTR.
The Claims Code will set out the minimum standards that private individuals should expect when making a claim – whether they are policyholders or third parties. These are:
Plus the Code will be backed up with benchmarking of the industry's performance through twice-yearly surveys of recent claimants.
SALTR is a quality-mark scheme that will apply to savings and insurance brands. A brand will be a name with which consumers identify. There will be demanding standards, based on three customer-focused principles:
All products in the brand must meet all the standards. An independent accreditation board will police the new regime and award the quality marks. Its board will not include industry practitioners, and, once operational, the scheme will be self-funding.
The Claims Code and SALTR show how the industry is responding to the new risk-based regulatory environment. If we reduce the risk of problems in selling, in product design and in claims handling, we also reduce the need for heavy-handed regulation, and can win for insurers the space to conduct their business.
GISC will need to satisfy a lot of different audiences – the government, Brussels, the media and, of course, consumers. But in order to work well, it must focus exclusively on whatever regulation is necessary. The insurance industry is committed to raising standards – and to being viewed to have done so – in a demonstrable, continuous and verifiable way. This must be reflected in how it is regulated.