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As Auckland, Northland and other parts of New Zealand lay under siege of the weather gods, senior leadership teams of every major insurer in the country are undoubtedly preparing to either count the cost or count the claims.
It is during such siege, and for many policy holders genuine crisis, that the true value of a speak up culture becomes evident.
The commitment to encourage people to speak up and to provide external speak up channels to do so roots out poor performers, dim-witted decisions and dubious practices. Speaking up about behaviours that gives rise to concern protects companies from criticism and prevents the controversy scores that undermine investment – whether this be public or private.
But if speaking up is neither effectively managed nor valued there will inevitably be insurers who are heading into a deluge of claim activity from cultures best expressed as troubled waters.
Media reports confirm that 26,000 claims have been recorded across the largest three home, contents and car insurers. Damage to homes, businesses and infrastructure coupled with the destruction of social routine and community well-being has been laid bare across every media outlet.
For many homeowners or residents the recent floods, much like the Canterbury earthquakes, may well represent the first time that their everyday and mostly ordinary lives have been put on hold.
Dominating their thinking for months to come will be their insurance policy and potentially the fine print they didn’t read.
Fully exposed to the vagaries of insurance company processes many will be confronted by outcomes that will either make, break or muddy their future livelihood.
Its one thing to claim for an inconvenient burglary of a few items and quite another to claim for a red stickered family home in its entirety.
But while Tim Grafton CEO Insurance Council declared that the floods were unprecedented on this scale it emerges that another aspect of the hapless insurance sector is also unprecedented.
The professional bodies, the Insurance Council of New Zealand and Insurance Brokers Association of New Zealand who represent their members or member organisations have yet to recognise the value of supporting professional ethics as a means to safeguard reputation and trust while promoting good customer outcomes.
Neither forums nor panels nor conferences nor continuing professional development programmes offer any thought as to the benefits that accrue from applying practical ethics.
Already we are seeing the abrupt changes in heart, flip flopping at best that reflect poor judgement and an overt focus on compliance as opposed to discretionary decision making based on values. The latter, of course, being a hallmark of an ethical culture.
A 71 year old woman was advised by her insurance company, AMI, that it was company policy for flooded vehicle claims to require photographic evidence.
Without this an immediate pay out would be delayed.
Of course when you are being rescued from a submerged home the thought of ‘holiday snaps’ of your equally submerged car is not quite top of mind.
In fact, it would be silly. Eventually AMI conceded. Their initial decision was reversed with an apology for the upsetting experience. Let’s insert ethically unsound and you get the picture.
It is fully expected that over the next 12 months the lightning march to policy specifics that reflects a compliance focus will inevitably lead to a thunderous clamour of complaints.
Sandwiched in-between will be arguments based on ethics and values that will stray into allegations of misrepresentations and inevitable misunderstandings and misinterpretations.
So too will be examples that reveal how the absence of a speak up culture has enabled poor or simply misguided behaviour to take hold.
In no small measure the findings of the FMA’s Findings from their Evaluation of New Zealand Fire and General Insurer’s responses to the 2019 Life Insurer Conduct and Culture review must find its way into these conversations. .
Critically, at the time, the FMA found that the level of conduct maturity amongst the 42 participating insurers was low. Some insurers demonstrated that they did not see conduct and culture (insert the word ethics and you realise how disturbing this is) as relevant to their organisations.
None of this is surprising when their professional bodies adopt exactly the same mindset – a mindset that has not changed for years. One of the most egregious findings of the Review was that only 9 insurers recognised customer vulnerability as a key issue.
Similarly disturbing, according to the Review, was that several insurers were confident their business did not suffer from any conduct issues, despite not undertaking a meaningful assessment.
Again this echoes the sentiment of the professional bodies in believing that any professional development in ethical culture, ethical leadership, or speak up culture etc was unwarranted despite no evidence to the contrary.
In the words of Clare Bolingford, FMA Director of Banking and Insurance “Insurers must ensure they are operating responsibly by taking their conduct obligations seriously and creating meaningful change where it is needed to achieve fair customer outcomes”.
If 26,000 claims don’t put fair customer outcomes in the spotlight then I’m not sure what will. But, sitting behind this needs to be insurance companies that are both capable and committed to professional and business ethics, where a speak up culture affirms good behaviour and calls out the ethical laggards.
At last count, I’m not holding my breath.