Are we really any better than banking?

The furore and outrage over the Swinton fine for miss-selling has started to subside and everyone is getting on with their insurance lives. It’s not often that general insurance features so prominently in the national press and it is such a shame that one of its rare airings was based on miss-selling.

But the episode showed me two things. First of all, this market appears to delight in outrage and moralistic ramblings. Some of the comments responding to articles covering the story were actually quite funny in their outrage. They certainly had a ring of “outraged from Chiswick” to them. Some did seem rather sanctimonious.

But what struck me the most was the apparent shock that met the fine which brings me on to my second observation. Are we really that shocked that an insurance firm placed the need to make profit over the needs of customers? Did we think that this kind of behaviour was somehow magically the preserve of banking? What made us think that an insurance company management team would not choose to sail far too close to the wind?

It certainly makes things difficult for those who have long been arguing that insurance is different to banking and other financial services – we simply don’t indulge in that kind of behaviour, so the argument went. It’s not gentlemanly.

What the Swinton miss-selling episode has shown is that at its worst, insurance is just as susceptible to falling under the control of the avaricious, the thoughtless and those who lack any morality. We are not a special case and we need to wake up to that fact.

Those in the know say that another big fine, for another insurance business, is on its way. There is no indication yet who is going to face their moment of infamy, but it’s coming alright and what really terrifies those for who represent insurance in government and the regulator is that this will give credence to the view that there is a systemic problem in insurance.

It bores me to hear people bleat about how insurance has a bad name – people don’t understand what it is we do and how they ignore all the good stuff – but poor reputations are earned, not made up. What is coming out now is the dark side of insurance, the practices that have been hidden for too long. Insurance as an industry has made a fine art of being ambiguous, slippery and, it would appear on occasions, downright dishonest.

We need to face up to the fact that we are not the ‘good’ financial service. We are no better or worse than the others and we need to address that. For sure, none of our major insurers had to ask the taxpayer for a bailout, but what we can’t do is allow ourselves to fall into the trap of becoming a public and political punchbag like banking; we need to be honest about our shortcomings.

Rather than turn the other way, we must be vigilant and identify and whistleblow on poor practice wherever we find it. In particular, our trade bodies need to stand up and criticise, even at the risk of some unpopularity. This can take courage – those companies in the firing line also pay the trade bodies’ bills, however, staying silent risks those firms doing so much more damage to the reputation of our sector.

This is no time for mock horror and gnashing of teeth – collectively we need to identify and admit where we have gone wrong, highlight and drive out poor (and frankly criminal) practices and finally, face up to the fact that a great many consumers find us horrible to deal with. Accept that and try to change it. Only then will we be able to start taking steps towards being an industry, or indeed a profession, that we can all be confidently proud of.