Move away from ‘ethical sheep dips’ to restore reputation

The latest thought-provoking Business Breakfast organised by the Livery Committee heard Charles Wookey, CEO of A Blueprint for Better Business, urge the insurance industry to be pro-active in restoring its reputation.

Speaking at a virtual event attended by over 70 members, Mr Wookey said insurance had suffered severe damage to its reputation in recent years and that had been magnified by its response to claims arising from the pandemic which will “cast a long shadow into the future”.

“There is still a simple test of whose side your customers believe you are on. And that is about not just what you did, but how you made them feel. People will remember the extent to which they felt their insurers were there for them, with their best interests at heart and, within the limits of what is fair and reasonable, strove to do what is right for them at a time of acute need”, said Mr Wookey.

The answer lies in moving away from a focus on reputation alone, obsessing about compliance, codes of practice and taking “ethical sheep dips”, as rediscovering a sense of purpose. It needs business, especially the financial services sector, to move away from the Friedmanite focus on profit maximisation and to develop a deeper appreciation of what motivates individual human beings. This is a thesis that Mr Wookey and his colleagues have developed in their work with several leading financial institutions.

“Our view then, was that achieving real change in the relationship between business and society required challenging how businesses think about both purpose and people. Part of the shift was for businesses to recognize that they mostly can and should have a reason for being that benefits society – reflected in what a business says, what it does and how it does it. Profit is vital, but as one outcome, not the purpose. The other is that a business needs to see itself as a human system, one that cares about people”.

He said the origins and core functions of insurance to mitigate and share risk gave it a sound basis for building a better future for itself. This would serve it better in the long-term than a narrow focus on more compliance and more regulation and implementing that within firms: “… taking a purpose led approach not only puts the needs of the customer first, but in the process also helps mitigate the regulatory risk you will otherwise face”.

He highlighted three areas where the insurance industry has the opportunity to re-build its reputation through a renewed focus on its purpose: risk prevention, using technology – especially artificial intelligence – to build better relationships with customers, and using its huge investment might for the wider benefit of society.

His speech provoked a lively debate with members praising his analysis and welcoming the bold challenges he set the industry.

• Download Charles Wookey’s presentation

• Find out more about A Blueprint for Business

• Date for the diary: The next breakfast briefing will be on Thursday 8 April 2021 when we will hear from fellow Livery member Angela Peacock, CEO of PDT Global, on another thought provoking topic.