Category: Management

Why Ethics Matter in Insurance

Posted by: Agent Hub

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There are many important characteristics all insurers and insurance agencies should have. However, one of the most vital qualities is a company that has ethics and values. Especially for an industry based on relationships and a strong focus on people, establishing a code of ethics and a list of core values just makes sense.

Whether you are an insurance agency working on creating your company’s ethics and values, or you are looking to hire new talent for your agency, it’s helpful to understand exactly why ethics matter so much in insurance. Here are some reasons below to have an ethically run agency filled with team members who share the same values as you do.

Without Values Your Agency Is At Risk

If your agency doesn’t act in a way that most customers would view as trustworthy or ethical, then your agency’s reputation will suffer in the marketplace as a result. This can lead to a variety of other issues, including a decline in customer confidence, lead generation and talent recruitment. Put simply, people don’t want to work for or buy from a company that cares more about profit than about doing the right thing.

Ethics Help Build Company Culture

Employees are more likely to stay with a company that has built a culture on core values. When your agency works hard to develop these values and actively strives to uphold them in every way, your employee morale will be higher and they will be more driven to succeed. Aim to implement your agency’s core values in a variety of ways, from your meeting structures to training materials.

Regulations and Laws Based on Ethics

One foundational piece related to any business is the law. Knowing the list of state and national laws that relate to your agency — and sharing them with others in your agency — is a great place to start when building values.

Agents Provide Advice

Insurance professionals often do more than simply sell policies and bind coverage: they are advisers as well. Poorly constructed discussions of risk can be a huge disadvantage to both the insurer and the insured. Giving the wrong advice (or not enough advice) to policyholders when binding coverage can lead to holes in a policy or conflicts with policyholders who didn’t obtain the coverage they truly need.

Ethics are also highly important in claims situations. Customers who file claims need to understand the claims process, understand that your agents are there for them and feel open to asking questions as needed. That’s why it’s so beneficial to have agents who practice risk management both pre- and post-loss.

Core Beliefs for Insurance Companies

Some examples of values your agency should consider include honesty, respect for other people and respect for other people’s property. To implement and uphold these beliefs in action, it will also require accountability, integrity and leadership on your agency management’s part. Strive to combine these values with others that matter to your agency, but make sure that those who don’t adhere to these values are held accountable and that your leadership team is always setting the example for others to follow.