James Moorhouse examines how Covid-19 has transformed the culture of the insurance profession
Covid-19 has transformed the ways insurers are working, while simultaneously presenting them with an opportunity to drive culture change. Leaders at all levels play a vital role in shaping the culture of an organisation, providing behavioural cues to their teams and the wider business. Leaders should consider how the way they lead may have changed and what skills are needed to successfully lead in these uncertain times.
Improving the reputation of the insurance sector is a key priority for insurers, brokers and all those working within the profession. Much has been written about the insurance sector suffering a poor reputation due to reasons including the banking crisis, the business interruption test case and media reports of unfairly rejected claims. But for there to be any meaningful change across the sector, first it must come from within.
Defined by everyone
Each workplace is different, made up of people from different backgrounds, skills and experiences. Therefore, a culture should be defined by everyone, not just from the top level down. Culture needs to be purposeful with a meaning behind it. It should also be inclusive and worthwhile. This means listening to employees from all levels and allowing them safe opportunities to speak up and feel their opinions are valued.
Office environments were traditionally a collaborative space where people could meet, raise their profile and be seen to be getting the job done. Remote working has changed working styles overnight, meaning that it is not enough to be seen to be doing something – it actually has to be done. Greater flexibility in people’s individual circumstances and schedules has now taken greater priority over cramming everything in within a set number of working hours. This has hopefully encouraged people to identify what suits them best to create a better working day.
But how are these changes identified and implemented? Purpose is not just something that’s a whim of CEOs. They need to be able to trust employees to have and know the purpose of the company and do the right thing. How solutions are developed to local problems can lead to higher levels
Lockdown has provided some employees with greater visibility of their leaders and CEOs, who have communicated more regularly through videocalls, intranet posts or company updates. Establishing better communication across staff levels has demonstrated a commitment to customers and people internally, meaning that the voice from the top comes from a more authentic place.
Creating the culture
But how can leaders create that culture and make it sustainable? Lockdown restrictions accelerated the change of working styles and patterns overnight. Many adapted well, acknowledging that fixed and rigid process that were usual practice within an office were arbitrary. By recognising the individual capabilities and resourcefulness of employees, an organisational shift took place that allowed employees to drive forward their own working styles in a more collective way.
People have become more self-reflective; challenging cultures that existed before Covid-19 by identifying what worked and what didn’t. Innovation and emotion have developed mutually so that workplaces are now more flexible and less reactionary
By learning from collectivism, more can be understood about leadership in action, rather than leadership after the event. The following questions raise important points about the stages of change:
- What does effective leadership look like – how has it worked during the Covid-19 crisis?
- Are we into a ‘new normal’ – how can this be made into a transformation event?
- What can be done right now?
The shift from the leader, not just as command and control, but in demonstrating an understanding of their workforce, has highlighted a new managerial style that is both relevant and progressive. Leadership has a priority to understand people and themselves – not just run a company and keep it afloat. By recognising the diversity of experience and the response to experience, leaders are better able to identify the worries workers have and how to action them.
People have become more self-reflective; challenging cultures that existed before Covid-19 by identifying what worked and what didn’t. Innovation and emotion have developed mutually so that workplaces are now more flexible and less reactionary.
Social collaboration is good for individuals and also good for business. Regarding reputational risk, a recently published research report by Chartered insurance broker Selena Kearvell for the Society of Broking Professionals identified four main areas seen to negatively impact the perception of the insurance sector:
- The sector has traditionally lacked diversity in its makeup – is this still the case?
- Insurance broking has no entry requirements in terms of qualifications - would brokers earn greater respect if they were more ‘qualified’?
- Brokers recommend insurers to customers – the use of unrated insurers has garnered press attention where insurers have been liquidated; does the recommendation of unrated insurers affect the way people view insurance brokers?
- Insurance brokers currently work on commission or fee or both – does the way in which brokers are remunerated cause distrust from customers and the general public?
The insurance profession prides itself on being about people – protecting people, their assets and their livelihood. Given this end user-centric approach, insurance brokers need to ensure they represent the people they service. A lack of diversity could reinforce negative perceptions of the sector and put off potential customers from using brokers.
There is also no obvious academic route to becoming an insurance broker, nor are there mandatory qualifications to achieve before you can start giving advice on insurance placements. At present there is no ‘insurance’ degree that can be undertaken at university for insurance brokers. Due to this, the prestige of becoming an insurance broker is unlikely to match that of an accountant or lawyer, who must complete compulsory examinations. While there are qualifications available, professional training should also incorporate the development of communication and negotiation skills.
Customers rely on insurance brokers to recommend suitable markets. The placement of business with unrated carriers poses a significant reputational risk to brokers if they default and collapse. But there are legitimate reasons for placing business with unrated insurers, such as when a company cannot afford premiums from rated insurers. However, one solution is that brokers who continue to place business with unrated insurers pay a greater levy to the Financial Services Compensation Scheme.
There also needs to be greater transparency with fees. Commission is not always disclosed as fully as it could be to policyholders. While taking commission is not inherently ‘bad’, clearly charging a fee should mean there is no doubt that a broker is at all times trying to find the widest, most appropriate cover at the lowest price available with a suitable carrier.
So, will leadership and the culture of the profession revert back to what we had before Covid-19? Can leaders change? We cannot go back because leaders have demonstrated they are not detached from the current emotional and political context. Plus, leadership has been redefined beyond roles and titles to actions and activities. Most informative innovation has emerged through followers by moving away from old models of leadership that were perceived as ‘all powerful and all knowing’, rather than reflective of the entire workforce.
By learning from failures as well as successes, there will be a move towards a people-shaped culture. This can then be reflected in the diverse makeup of a company, which will influence the decisions made in processes that customers want to feel truly acknowledge them.
James Moorhouse is content manager of the CII