C4 Dispatches:: insurance industry – profit before people


The insurance industry, consistently, dispels the myth of “honour amongst thieves”. In this programme we see it through the lens of motor insurance BUT bad practice doesn’t stop there.

If you didn’t watch the programme…you should! Follow the link embedded in this picture (may only work in UK – sorry!).

motor ins ripoff

For the sake of clarity, you may, also, wish to consider the definition of the word that the Office of Fair Trading used to describe the motor insurance industry: DYSFUNCTIONAL Read more of this post

UK insurance ‘dissected’


I felt compelled to respond to some comments that were prompted by a previous article:

IBM Insurance:: does the industry really care what customers want? I wonder…

The following comments come from a, highly experienced and senior, former insurance executive, who now works for one of the major Global Consulting firms. Obviously I wouldn’t name names without first gaining the approval of the individual in question but I really wanted to share my thoughts. After all that’s why I blog.

For many years I have eagerly anticipated some meaningful debate with thought leaders, passionate or concerned people from within the insurance industry. But I have been, consistently disappointed. I wish I was more confident that these views might spark some meaningful discussion…but I won’t hold my breath!

The comments:

I think David Wilson is making the point that despite the results of the IBM survey, he’s seeing little action from the UK insurance industry. I think at the moment UK and Western European insurers have their hands full with Regulation – Solvency II, RDR – and this is diverting their attention.

Even so, in terms of innovation, UK insurers (or at least Northern European insurers) are seen as leading the global pack in terms of capital effectiveness and optimisation, with the North American market looking to UK as an example of best practice especially in the area of risk management.

My response:

What are the key issues identified:

  1. Compliance with additional Regulation – brought about by cultural, operational and regulatory failures
  2. UK & Europe seen as innovation leaders – based upon the above, should this be the case? And,
  3. capital effectiveness and optimisation – are these correct metrics for innovation and compliance?
  4. risk management – where is the evidence of “best practice”? – I see plenty of evidence of “bad practice” that has become ‘accepted practice’ across the industry. What are current practices in relation to complexity, business resilience and systemic risk?
    Insurance and banking have convinced themselves that they have been/are innovative but, if this is true, why are they the least trusted and most complained about industries according to their customers? Does that not explain the perceived need for more regulation?

Read more of this post

Transparency the price insurance can’t afford:: MP’s have claims management companies in their sights


As I have been saying for several years, when it comes to TRANSPARENCY for the insurance industry, “resistance is futile”!!!

Whether the current concern is broker commission disclosure, OFT investigations in pricing and activities of the motor insurance market, the collapse of Merlin Loss Adjusters, appalling customer service or Loss Assessors being sent to prison THE MESSAGE IS CERTAINLY TRANSPARENT…but, for how much longer can the industry remain in denial?

The decision of government business managers to schedule a three hour backbench debate next Thursday (8 November) on the Regulation of Claims Management Companies shows the level of concern across all parties at the activities of these firms, especially in relation to personal injury claims and payment protection insurance (PPI) compensation.

via MPs have claims management companies in their sights- 01 Nov 2012 – Post Online Blog.

Economic resilience for Scotland requires INTERdependence


I don’t wish to engage in or contribute to THE political debate on how the interests of our nation are best-served! No offence to Salmond or Lamont  but, rather than listen to them, I would defer to some “older wisdom”…no not Ming Campbell:

“To put the world right in order, we must first put the nation in order; to put the nation in order, we must first put the family in order; to put the family in order, we must first cultivate our personal life; we must first set our hearts right.”

Confucius

Apart from cultivating greater personal understanding of how WE can contribute to a better Scottish society, our greatest challenge is how to (re)build financial resilience: create a sustainable economy and undo the damage done to our finances, our hard-earned reputation for economic thinking, innovation and business leadership. Read more of this post

FSA:: Lord Turner’s "paradise" lost


I’ve never met the man but I like the cut of his jib. Perhaps it is the novelty of someone in high (financial) office admitting what his peers feel they cannot…even though, with brief explanation, a child could differentiate good guys from bad!

Lord Adair Turner, the outgoing chairman of the Financial Services Authority and a candidate for Bank of England governor, said last night the FSA had spent its first eight years in a “fool’s paradise” of delusion about financial risk.

via FSA was in fool’s paradise, admits Turner | Herald Scotland.

So the problem is pretty well framed and, dare I say, understood. But WHO IS PREPARED TO LISTEN TO POTENTIAL SOLUTIONS OF THE VARIETY ADVOCATED ANDY HALDANE AT BY BANK OF ENGLAND?