Opinion: Chris Hanks on protecting the insurance sector's reputation

I’ve been thinking a lot recently about training and development in the industry.

I’m still involved with insurance, but since I stepped down from Allianz I have been able to look with a friendly – but critical eye – from further afield at the professionalism of the sector and how it is perceived in wider society.

At a recent lunch for the Chairs of Risk Committees sponsored by the Prudential Regulation Authority, the range and severity of the risks confronting us was frightening. As professional risk takers we must always be thinking about how future developments could hurt our customers and how well placed we are to help them survive and prosper.

Given our role in taking risks off our customers it never ceases to amaze me how poor our esteem is with the public, politicians and press. We are so vital to their safety, well-being and economic success I suspect we have only ourselves to blame.

Complex
In short there are too many scandals, the industry is too complex and has too many mouths to feed. We shoot ourselves in the foot every advert break on television where insurance companies have singing and dancing actors saying cheap, cheap, cheap. The underlying message to the viewers is that others are ripping them off.

Maybe we are. Maybe the triple evils of relegating the importance of underwriting (and underwriters), neglecting professional and technical capability and failing to train and develop our people, have come home to roost.

We no longer proclaim our strengths or fight our corner.

We have largely given up on independent technical research and testing.

The Grenfell tragedy bought this into sharp focus. Such a tragedy had long been forecast by insurers witnessing the dismantling of fire protection in the built environment. Timber, plastic, polyurethane replacing brick and stone. At the same time property protection measures, many driven by insurers and in place since the Great Fire of London have been ignored or removed by lawmakers.

Instead of saying no, insurers and brokers caved in and also for last 12 years and more have reduced the premium. Madness.

It never ceases to amaze me how poor our esteem is with the public, politicians and press. We are so vital to their safety, well-being and economic success

Professionalism

Yet at the core of our industry is a profession. At the heart of which sits the Chartered Insurance Institute with its Royal Charter remit requiring the professional body “to secure and justify the confidence of the public”.

Historically insurance has been at the forefront of protecting the public, their wealth, health and their businesses and forcing improvements in many areas of life and property.

That means taking a stand, being unpopular.

That is best done by people properly and technically trained who can argue the case. People not only technically trained but also experienced about the risks being taken. Crucially, such knowledgeable people making those decisions know that saying no is okay.

These are people adhering to the highest professional standards. To me, this is the role of the underwriter.

Modernisation
I sense that, at last, many are realising that diminishing returns, lack of enough skilled people and rising threats means change has to happen. In many cases it has already started.

Modernisation is on the agenda and for the smart companies, brokers and insurers alike, excellence in underwriting is back.

This means that thankfully excellence in the development of people is back.

Professionalism in everything we do is back. Sadly it is not true across the board but those businesses focusing on the return to core key values will undoubtedly be the winners of tomorrow. Which can only benefit the reputation and profitability of insurance in the longer term.

Chris Hanks is former commercial chief at Allianz and holds numerous non-exec roles in insurance

ia debates

Chris Hanks makes a forceful point about the need for, and benefits of, professionalism in insurance. He challenges the industry to do better. But ultimately is hopeful of better times ahead. Do you believe there is a growing push for greater professionalism? Is the reputation of the industry set to improve? Leave a comment below or join the debate at www.twitter.com/#insagedebates