Very few things irritate me about our sector, but the consistent, and it seems, increasing tendency of people both inside and outside of the profession to refer to insurance as an “industry” has really started to have that effect on me. And I know I am not alone in that. Sian Fisher, CEO of the Chartered Insurance Institute for one has also been increasingly vocal in expressing her frustration with the term being applied to what we – in the insurance profession - do.
Why does it bother me? Is it not just semantics as insurance is a business after all? It may be a business, but that does not mean it is an industry, and with it the inference that we are producing goods, not being recognised for the hugely valuable service we provide. Brokers and insurance professionals are acting very much as trusted advisers to their policyholders and this requires them to have the expertise, experience and knowledge to support so many aspects the world we live in. In fact, much of what we own, transport, or do, grinds to a halt without insurance cover being in place. That’s a very salutary thought, and one which surely means we can respect the professionals who operate in our sector?
The term “industry” originally referred to “economic activity concerned with the processing of raw materials and manufacture of goods in factories.” In the years since the term originated in the 16th century, usage has changed slightly, and can now refer to a particular group of companies linked by their primary business activities, but the manufacturing connotations still exist. Insurance, even in some of the highly commoditised personal lines areas, is a business far removed from the practice of processing raw materials in any shape or form. The term “industry” just doesn’t seem to fit anymore. A business however is defined as an organization which produces and sells goods, or which provides a service. A solicitor, accountancy or surveying practice is also a business – and a profession, and this analogy seems to corroborate our sector and what it does far more aptly.
No matter how you look at it, or which part of the insurance market you refer to – be that highly commoditised non-advised personal lines products or highly advised large corporate insurance – insurance (businesses) are professional. Yes, insurance is a product that is sold but it is based on professional and technical underwriting (and that is true even for algorithm based personal lines), serviced by technically trained claims professionals and sold often via professional brokers.
So why do we insist on the continual use of the word industry when it means that our professionalism is not recognised by many of those outside of the sector, nor by some within it, and that is not helping in the battle to gain customer trust.
Yes, the business of insurance may not yet be, in all its guises, a full profession but it is on that very important journey and it is, in the main, professional in its approach, its attitude and its make up.
I have worked with a lot of firms in the market, from insurers to brokers, and I know that many of them are highly professional in all that they do; their staff are skilled, trained and undertake regular CPD, they work to a code of conduct and ethics and they put the customer right at the heart of their business. And some have taken the extra and very important step to gain Chartered status to provide independent recognition of those standards. And here I believe lies the answer that we may be looking for. To actively value what the CII offers us and to truly embrace the professionalism it gives us from when we enter the profession and on our continuous journey as we develop.
I truly believe that if more insurers, brokers – and now MGAs via the Chartered Underwriting Agents status - take the step to embrace Chartered status, then it would be a major step towards having the market’s professionalism and professional status, understood and accepted. By both those within the market and those outside of it.
Managing general agents are no different and should also embrace the Chartered marque. Magenta was recently awarded Chartered Status as a member of the MGAA, which has been instrumental in establishing the new status in collaboration with the CII. This is available to all MGAs and individuals, providing a fully standard linked distribution chain from paper to policyholder and that chain is strengthened by all connected parties. This provides third party independent validation of your practices, which in turn helps to improve trust in your operation, pride for your team, confidence for capacity providers, brokers, suppliers, and wider society. It demonstrates that your employees are performing at a high standard and that as a collective you really care.
The Chartered Insurance Underwriting Agent title, for both individuals and firms, is something I would urge all of those working at MGAs, and who run MGAs, to aspire to and embrace. We are professional in what we do, and we are on our way to becoming a profession. So, wouldn’t it be fantastic to take the plunge, and let us move the dial of the insurance business from industry to profession?
How different, for example, would the ongoing business interruption dispute sound if the headlines and stories were focused on how the insurance “profession” is challenging the rulings, the insurance “profession” is working to resolve the perceived gaps in insurance cover. It is a subtle shift, but seismic at the same time.
