A new report from the Society of Insurance Broking (SIB) has identified four areas of reputational risk. It included a breakdown of diversity and inclusion within the sector, along with qualification requirements, recommending unrated insurers and commission-based renumeration.
SIB’s report has explored the idea that improving the diversity of the broking profession will directly benefit the reputation of insurance brokers and drive better outcomes for customers and clients.
The lack of mandatory qualification requirements in the insurance broking sector is identified as a reputational risk. The report suggests a consensus on qualification requirements and professional standards would benefit the understanding of insurance as a skilled profession, which would incur improvements on public trust.
The report states ratings benefit consumer trust as they provide an assessment of the stability of an insurer and their ability to pay claims to policyholders. To remedy this, the report suggests making it a legal requirement to use ‘rated’ insurers or implementing an increased levy on brokers that use unrated insurers.
SIB also sees the way insurance brokers get paid may be a source of distrust for consumers who view commission-based work as a possible conflict of interests. The report recommends that increased transparency would increase consumer trust, pointing towards the impact the Retail Distribution Review had on the public perception of financial advisers.
Liz Foster, Non-Executive Director of the Society of Insurance Broking, said: “Every day, I see examples of brokers going above and beyond for their customers and clients, but we must always strive to do more. Improving the reputation of the insurance sector is a key priority for insurers, brokers, and all those working within the profession.
“I believe that there are changes which need to be implemented to ensure that the insurance broking profession flourishes in the long-term, and the predominant factor here is consumer trust.”
