Investing in the Profession: Turning professional

Edward Murray asks if the seemingly endless debate on professionalism has finally reached a conclusion

Was there ever a time in the insurance sector when practitioners did not bemoan the fact it was viewed as an industry rather than a profession and that it always seemed to play second fiddle to its banking, accounting and legal peers?

The debate on professionalism has been kicked around the marketplace for many years without much action. However, it seems that there is now a concerted effort to garner support around a professional standard and lay out exactly what the industry stands for and the professionalism it represents.

This new standard comes under the grandly emblazoned banner of The Aldermanbury Declaration, but just what does this declaration seek, how will it be received and why will it make a difference to how both customers and potential recruits view the world of insurance? Will it be enough to reinvent the market and like a chrysalis transform it from an industry into a profession?

The Aldermanbury Declaration was published at the beginning of March and has given the insurance market until 2013 to sign up to its edicts. It was the result of six months of work by The Insurance Profession Task Force, which was sponsored by the Chartered Insurance Institute and led by its president Barry Smith.

The declaration seeks to create a sound framework of measures (see p.35) that will enable the market to prove its willingness to embrace professionalism, deliver consistent and improved results for its customers and attract and retain the very best people from the labour market. Commenting on the declaration, Smith said: "I think what we are looking for here is clear direction on how we can improve standards and how we can improve them by more education, knowledge and training and out of that produce what will be better outcomes for our customers."

The big push

But why the big push now? It seems that the insurance market, which normally pays out when people run into problems, has decided to take advantage of the issues in the financial sector, particularly the banking sector, and use them to give succour to its own efforts to improve both its substance and its image.

Opportuinistic? Definitely. Effective? We’ll have to wait and see.

The Insurance Profession Task Force has looked to work with representatives from every corner of the market and in producing a consistent set of standards in which customers and potential recruits can take confidence, hopes it can at last make a difference.

The CII and its Insurance Profession Task Force make no bones about the timing behind the initiative and Smith comments: "It was the collective desire to further understand how we could prove the standards on offer to the customer and improve the perception of what we do. The catalyst was what has happened in the banking sector."

The important word here is ‘perception’. Time and again the insurance sector has suffered at the hands of a public that fails to recognise what it does as characteristically professional. Whether this is because of the everyday nature of some insurances, the lack of penetration that Chartered status has so far managed to gain in the insurance sector or poor experiences that customers have had, remains to be seen.

However, there is little doubt that professionalism and insurance are not two words that tend to trip off the average person’s tongue in quick succession and the public has lost trust in what insurance brokers, in particular, have to offer.

This was made patently clear by YouGov research carried out last year for the CII. It found that only 12% of those asked trusted their insurance broker, rising to 22% for general insurance providers.

Although investment banks and investment providers fared worse than insurance brokers, it was galling for the insurance sector to see 40% of people still trusted their own bank. Not because it is wrong for them to do so, but because it has proved so hard for insurers and brokers to generate that same level of trust for themselves.

A lack of trust is not the only factor preventing people from associating professionalism with insurance. Eric Galbraith, chief executive of the British Insurance Brokers’ Association, says: "In the last 20 or 30 years there has been an increase in commoditisation and automation and the idea of professionalism has faded."

When people understand and regularly research and buy the likes of travel, household and motor policies for themselves, the perception of those that sell them is not as high as it is for the practitioners in other financial and professional sectors.

However, by focusing on the standards, qualifications and ethics of those that conduct insurance business, Aldermanbury aims not just to improve the perception at the moment, but to continue to build it up as the years unfold by attracting better and more capable people into the sector.

Amanda Blanc, deputy chief group executive officer at Towergate, comments: "We work in a very interesting and professional sector but we don’t seem to get that across and always have trouble attracting people."

But if Aldermanbury gets businesses signed up to its measures, drives qualifications, pushes membership of professional bodies and makes chartered status a necessity for top tier operators, then it should also help exemplify the insurance market as a place ambitious and motivated individuals can go to enjoy a fulfilled, well-regarded and mapped out career.

Blanc is keen to point out that the broking sector and the rest of the insurance market, already does a good job and that The Aldermanbury Declaration should not be seen as an overhaul of something that doesn’t work. Instead she says: "I do not think that we fall down in general and retention rates, for example, tend to be very good. However we are poor at communicating our good results."

If Aldermanbury is to become anything more than a marketing campaign around professionalism and actually improve the standards within insurance and the perception of it from without, then firms across the market need to sign up to it and pin their colours to its mast.

The basic tenets of The Aldermanbury Declaration

Commitment to excellence All firms should operate policies towards: customer service, ethical conduct, qualifications and continuing professional development that demonstrate their commitment to the highest levels of standards and behaviour. These policies should be 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 • Support the development of knowledge, skills and expertise

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 brokers

Insurance intermediaries should meet the criteria for Chartered Insurance Broker status, as a demonstration of their commitment to excellence, applying these principles to the core disciplines.

Broking standards

Insurance intermediaries should ensure that at least half their operational management team is qualified to Advanced Diploma in Insurance (ACII). Other relevant technical qualifications should be encouraged.

Underwriting standards

Insurers should ensure that at least half the people in the senior underwriting management team are qualified to Advanced Diploma in Insurance (ACII), and all authorised underwriting agencies should ensure their lead underwriters are qualified to ACII level. Other relevant technical qualifications should be encouraged.

Claims standards

Insurers should ensure that at least half the people in the senior claims management team are qualified to Advanced Diploma in Insurance (ACII). Other relevant technical qualifications should be encouraged.

Management standards

Insurers should ensure those people in key leadership and management positions, for example broker relationship managers and risk managers, are members of an appropriate professional body and hold relevant professional qualifications.

• PB and sister title Post have this year launched the Investing in the Profession campaign. To see a video debate on The Aldermanbury Declaration, go to www.broking.co.uk/1596075.