Address to Worshipful Company of Insurers, 19th November 2020, by Charles Wookey, CEO A Blueprint for Better Business

In the middle of a pandemic, when the whole world is struggling to cope with a massive and continuing economic shock, it is hardly surprising the insurance industry should be in the eye of the storm. There is only so much the private insurance industry can do, and it’s a sitting duck for the media. Governments as the insurers of last resort are not having an easy time either, and for the private insurance industry its travails may be thought inevitable. Wise heads may counsel “its tin hat time”, and that this too will pass.

This would be a mistake, for two reasons.

First, the symptoms of a societal dis-ease with the UK insurance industry predate Covid and go much wider than current court cases over Business Interruption (BI) claims. As you know much better than I do before the COVID pandemic the industry was seeking to address its own local epidemic of distrust with over half the UK population believing insurers may fail to pay out in the event of a claim. In its excellent report last year on Public Trust in Insurance the Chartered Insurance Institute (CII) listed several widespread practices including dual pricing and price walking, ineffective communications and a widespread lack of transparency. It painted a somewhat gloomy picture of systemic issues in an industry, which it seemed only to budge when forced by the regulator. These reputation issues haven’t gone away.

Second, though there are clearly very difficult issues raised by the pandemic, how the insurance industry is seen to have handled itself during this extraordinary time – as with the banks, the health service and other critical sectors of the economy – will cast a long shadow into the future. Seeking to deduct government grants from BI claims payments doesn’t seem a smart move. And although I recognise there are clearly technical arguments on the validity of some BI claims, 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.

And this is worth emphasising at the outset as the title of this talk, I confess, is a form of mis-selling. I don’t believe the remedy lies in focussing on reputation. Thinking about “purpose” can be very fruitful as I hope to persuade you, but if the motive is only about reputation management it will prove spectacularly ineffective. As Abraham Lincoln said “reputation is the shadow and character is the tree. Reputation is what you think of it, but character is the real thing.”

Continue reading the whole speech HERE