The Aldermanbury Declaration sets out some ambitious proposals. Lynn Rouse reports on the ideas put forward and details the task force's vision for 2013.
In its own words, the Aldermanbury Declaration devised by the insurance profession task force sets out "ambitious" proposals — but ones that are also deemed "realistic". By December 2013, all insurance and broking firms are expected to have fully committed to this common framework for professional standards and implemented the package based on eight principles (see box, top right).
As of today, the task force — set up by the Chartered Insurance Institute last May — is calling upon colleagues and firms throughout the general insurance sector to sign up in support of the Declaration, which it stresses is: "Simply the beginning of a programme of activity, affecting professionals from the call centre to the board room — and ultimately speaking directly to the consumer." Aspiration is to be the central message of the campaign, chosen to reflect the key themes that underpin the programme — invoking as it does the elements of ambition, encouragement, support and challenge.
Alec Finch, president of AFL Insurance Brokers and task force member, adds: "This declaration embodies the aspirations of many colleagues across the entire general insurance sector who by examination, training, experience and conduct rank alongside the best of any profession. We have a unique opportunity here to establish the standards of competency and behaviour that future generations of insurance professionals must attain for the benefit of their customers, business partners, their own career development and the well-being of the sector as a whole."
Simultaneously, the CII has announced that corporate chartered status for insurance firms is now open for applications with immediate effect, in the hope that the first approved firms will be unveiled this summer. Corporate chartered status for brokers was introduced in 2007 and this new scheme follows growing demand for a similar concept for insurers, where the criteria have been designed to mirror those established for the broking community.
According to the task force: "We believe the award will send a powerful message to customers, staff and business partners that the organisation takes professionalism seriously, and is ready to declare its adherence to the gold standard among its peers."
Over the past six months, the task force has analysed at length the challenges facing the GI sector and concluded that action is needed. The Declaration, therefore, is designed to place a renewed focus on professionalism and deliver a range of benefits. These include: better outcomes for customers; improved standards of risk management; a more confident, trusted profession; more talented people attracted to a career in insurance; and more rewarding careers for those within the industry.
At one of the task force's earliest meetings, six objectives were agreed to underpin the work that lay ahead. Alongside developing the necessary frameworks and initiatives, these include securing senior buy-in to support, endorse and promote the professional standards and to ensure the programme of activity is realistic in terms of timeframe, relevance and cost.
So, in practical terms, what will insurance firms be signing up for? The first four principles fall under the collective heading of 'creating the insurance profession' and the first of those relates to the publication of policies that will be highly visible on company websites. As the task force says: "Transparency can be a wonderful weapon. When customers can refer to readily available documents that describe the attitudes and practices of a given insurance firm, they have the means to hold that organisation to account."
To put this in context, comparisons are made with other industry sectors where initiatives "demonstrate the power of openness". "In food retailing, labelling now provides consumers with the information they need to make better decisions around nutrition and product sourcing. While, in education and healthcare, performance league tables enable interested observers to compare and contrast outcomes."
The second principle, focused on training and development, is designed to capitalise on evidence that suggests "today's graduates are more likely now to consider insurance as a potential career than in the recent past. Against this background, insurance firms should seize the opportunity to convince large numbers of high fliers that they can enjoy varied, challenging and well-rewarded careers within the profession."
And there is a secondary requirement designed to help shape any schemes that firms devise: "The training programmes must instil in recruits a passion for learning and desire to keep improving their skill set. The world of insurance 20 or 30 years from now will display very little proximity to the one that, today, we find reassuringly familiar."
Benedict Burke, UK & Ireland chief executive at Crawford & Company, comments: "The principal challenge for the insurance claims sector will be to understand the changing needs of the consumer — be it commercial or personal lines based — in the global age of 24-hour communication and regulated service demand. At the centre of this will be the need for developing professionalism within our industry. The trust and confidence of the 'buyer' will be a prerequisite of success."
Principles three and four intend to drive uptake of the existing corporate chartered status for brokers as well as the new scheme for insurers. Reference is made to the recent You Gov survey, commissioned by the CII, which found 'chartered' commanded greater confidence among members of the public than other options, such as 'fellow'. Respondents used analogies with other sectors, in particular accountancy and surveying, where they had encountered chartered professionals, arguing it may mean the service will cost more, but it will be of greater value, will involve less hard selling, and will be more tailored to their specific needs.
The second group of four principles are designed to apply the first four within core disciplines — by stipulating quantifiable qualification levels for broking, underwriting and claims management teams. Demanding at least 50% be qualified to advanced diploma level has not been introduced just to look good — the task force is convinced this minimum standard will drive through material benefits. "If our focus groups are representative of the wider population, it is clear that professionals will attract customers — especially those with a moderate to high disposable income — and will work for those customers for many years. High standards among broking firms are, therefore, both in the wider public interest and give a tangible commercial return."
And the task force makes clear that its recommendation for "at least half" to be qualified is deliberate. "We do not believe it is necessarily appropriate for every single member of senior teams to possess insurance qualifications. Some may be qualified in other technical areas — for example, as actuaries. Our Declaration should, therefore, be viewed as setting the 'minimum threshold'. While many organisations will exceed it — indeed, some already stipulate that every member of senior teams in specialist areas must be qualified — the broader principle is that no firm should fall below the benchmark."
As for the eighth and final maxim, the task force concedes: "In many ways, our final principle is less precise than the preceding seven." But adds: "We still believe it carries profound implications in such areas as organisation culture, staff development, appraisals and recruitment processes.
"Since the wider management team will often comprise, for example, experts in areas such as finance, IT, HR and marketing, we do not believe it is appropriate to prescribe a certain proportion should be ACII qualified."
The Aldermanbury Declaration states: "We believe that commitment to this package of professionalism represents a determined statement of the intent of our profession to raise its standing and reputation with the public." As more details of the campaign are unveiled over the coming weeks and the focus of firms signing up turns towards the hard work needed to realise its objectives, we shall see whether it does indeed prove the irresistible mandate for action it hopes to be.
JOIN THE DEBATE: Register now to take part in a live online webinar to discuss the Aldermanbury Declaration. Chaired by Ant Gould, guests on the panel ready to take your questions will be:
Amanda Blanc, deputy group CEO, Towergate
Eric Galbraith, chief executive, Biba
Chris Hanks, commercial general manager, Allianz Insurance
Barry Smith, CEO Fortis, Taskforce chair
The Chairman's Foreword
A well-functioning insurance profession is at the heart of a modern, dynamic, flexible economy. It gives peace of mind to millions of homeowners and motorists, and enables businesses to trade and expand without risking their survival.
Of course, UK general insurance is not alone in this. There are many other disciplines that could make a similar claim — legal services, education, medicine, or accountancy to name just a few.
Yet, each of these professions differs from insurance in one vital regard. Research undertaken for the Chartered Insurance Institute by Ernst & Young into the defining characteristics of a profession shows that each one has a widely recognised framework for professionalism — encompassing training, qualifications, continuing professional development and consumer redress. By statute or by custom and practice, individuals and organisations working in those professions are expected to observe the highest possible standards.
Until today, the insurance profession has never seen anything comparable. Of course, there are many highly regarded organisations within the sector that are committed to a professional agenda, and have developed policies affecting their entire workforce that enshrine this belief into their working practices. And there are tens of thousands of individuals within general insurance who have taken the time and incurred the cost to achieve qualification levels operated by their professional body, the CII. However there are also hundreds of thousands who possess no qualification at all.
We believe this Declaration represents something unique to the whole of the general insurance profession.
For the first time, representatives from leading organisations throughout the sector — covering broking, underwriting, loss adjusting and claims — have come together as the Insurance Profession Task Force to formalise a Declaration. We are making this Declaration to send a message of reassurance to many audiences: customers who purchase our products and services; talented young people considering their career options; and those already embarked upon their journey as an insurance professional, who wish to sharpen their skills.
We trust our colleagues, and wider society, will welcome this as a positive statement about the path we are following together.
Barry Smith, chairman, Insurance Profession Task Force
Who's Who — The Insurance Profession Task Force
Barry Smith (chair) President, CII and CEO of Fortis UK
Amanda Blanc Deputy group CEO, Towergate Partnership
Simon Bolam Chartered insurance broker, E H Ranson & Co
Benedict Burke Chief executive UK & Ireland, Crawford & Company
Alec Finch President, AFL Insurance Brokers
Sian Fisher Managing director, OIM Underwriting
Eric Galbraith Chief executive, British Insurance Brokers' Association
Chris Hanks General manager, Allianz Commercial
Grahame Millwater President, Willis Holdings
Charles Philipps Chief executive, Amlin
Sandy Scott Chief executive, Chartered Insurance Institute
Angus Tucker Past president, Chartered Institute of Loss Adjusters
David Tyers Director of direct insurance, Aviva
Focus Group Comments — The Gauntlet Thrown Down
"I'm very worried that I don't understand the details of these insurances and the small print. If something goes wrong, you're unsure where you stand." Restaurateur
"Nothing about training was ever mentioned until after I'd joined — and not much even then." Young person from a claims department
"If a firm is chartered, it means [many of] their employees are chartered. It means they are likely to be more expensive, but worth it." Business mentor
"At this point, I don't see brokers as professionals but as salespeople." Director, water hygiene company
"I've no idea what qualifications these brokers need. I assume there is something, but I just don't know." Business mentor
"With underwriters, the repercussions if they mess up are significant." Freelance designer
"If you're buying a policy, a human being answers fast. If you're making a claim, it's press one, press two." Young lawyer
"I'm still getting to grips with what [training and qualifications] are expected of me. I don't have a structured or active way of doing this — it's coming through ad hoc conversations and looking at directors who started up performing my role." Relationship manager.
The Aldermanbury Declaration - the eight principles
Commitment to excellence
All firms should operate policies towards:
*Continuing professional development
that demonstrate their commitment to the highest levels of standards and behaviour, and ensure these policies are easily accessible to their customers and staff.
Training and development
Employers should ensure that people in the profession participate in a formalised training and development programme. Such programmes should:
*Lead, wherever relevant, to a professional qualification
*Underpin career development and increased professional standards.
Professionalism within insurers
Insurers should meet the criteria for corporate chartered insurer status within relevant business divisions, as a demonstration of their commitment to excellence.
Professionalism within broking
Insurance intermediaries should meet the criteria for chartered insurance broker status, as a demonstration of their commitment to excellence
Insurance intermediaries should ensure that at least half their operational management team is qualified to advanced diploma (ACII). Other relevant technical qualifications should be encouraged.
Insurers should ensure that at least half the people in the senior underwriting management team are qualified to ACII, and all authorised underwriting agencies should ensure their lead underwriters are qualifies to ACII. Other relevant technical qualifications should be encouraged.
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