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Chartered Insurance Institute
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FAQs


You can access a series of FAQs addressing common enquiries that we have received to-date below. As further queries are received the FAQs will be updated and expanded.

If there are any issues not covered on which you would like clarification or additional information please email aldermanburydeclaration@cii.co.uk

1. Declaration overall

What is the Aldermanbury Declaration?
What makes the Aldermanbury Declaration unique?
Does the Declaration require all insurance employees to hold a professional qualification?
Why is this being done when the overall general insurance market seems to be performing relatively well?
Are these extra steps really necessary, especially when more financial regulation is looming?
How will these changes make a difference for consumers?
Shouldn't firms be carrying out these training and competence measures anyway in response to normal market forces?
Have consumer groups been consulted in the development of this Declaration?

2. Task Force and signatories

How was the composition of the Insurance Profession Task Force decided?
Who is signed up to the Declaration?
Has the FSA been informed of this Declaration?

3. Training and development

Why should training and development be considered such a high priority for firms in these trying economic times?

4. Professionalism within insurers and brokers

Why should training and development be considered such a high priority for firms in these trying economic times?

5. Underwriting and claims standards

Why the focus on management teams?
Why at least half? Why not all underwriters?

6. Management standards

Why is this so important?

1. Declaration overall

What is the Aldermanbury Declaration?

The Aldermanbury Declaration is a call to the general insurance sector to commit to a common framework for professional standards of knowledge and conduct that could be met primarily through qualifications but also other means such as continuing professional development, ethics, etc.

Over the past six months, we at the Chartered Insurance Institute (CII) in association with a task force of 13 senior insurance industry figures, have analysed at length the challenges facing general insurance, and concluded action is needed. By placing a renewed focus upon professionalism within general insurance, we foresee a number of benefits both for those working within insurance, and for the wider society. These include:

  • Better outcomes for customers
  • Improved standards of risk management
  • A more confident, trusted profession
  • More talented people attracted to a career in insurance
  • More rewarding careers for those within insurance

What makes the Aldermanbury Declaration unique?

We believe this Declaration represents something distinctive. For the first time, this Declaration sees representatives from leading organisations throughout the sector - covering broking, underwriting, loss adjusting and claims coming together to articulate the minimum standards that we would expect professions to uphold.

We are making this Declaration to send a message of reassurance to two audiences in particular: customers who purchase insurance products and services, and those people considering or embarked upon a career in insurance.

Does the Declaration require all insurance employees to hold a professional qualification?

No. While the Declaration requires firms to identify certain individuals, within specified business functions, to hold relevant qualifications, it is about more than this.

It's about firms having a commitment to excellence and well structured training and development programmes.

It's about embedding a professional ethos across the sector in much the same way that a professional ethos exists in other fields such as law, accounting and medicine.

Why is this being done when the overall general insurance market seems to be performing relatively well?

Most aspects of the general insurance market are performing well, but there is scope for improvement and the industry must take the initiative.

Professionalism will bring its own rewards in terms of improved customer experience and operational efficiencies. If we can demonstrate that we have mastered self-regulation, we reduce the risk of regulatory intrusion and interference.

"As the credit crunch has taken hold it has become evident how intertwined the whole financial service industry is, not just in UK or Europe, but globally. General insurers do not sit in a bubble unaffected by this wider turmoil."Jonathan Swift, Editor, Post Magazine, 30 October 2008

"The professional integrity and competence of our industry will come under the spotlight during these difficult times, so we need the best in knowledge and experience."Chris Hanks, Insurance Times, 26 March 2009

Are these extra steps really necessary, especially when more financial regulation is looming?

There is no doubt that governments in all major economies are increasing levels of financial regulation, partly in response to the global banking crisis, which will invariably impact the insurance sector. However the measures in the Aldermanbury Declaration may pre-empt further government intervention in the insurance industry, for two reasons:

  • For some particular market issues, professionalism may serve as the appropriate remedy without risking the unintended consequences that legislation entail. This has happened in other parts of the financial services industry such as retail investments, and in other sectors such as accounting and law.
  • Professionalism might send an important signal that self-regulation more generally can work in the public interests. It would provide an opportunity for the industry to show that it is aware that there are market issues and that it is prepared to take serious measures in response.

"Creating greater clarity, force and transparency on professional standards will not only underpin the future standing of our profession, it will help redefine the public perception of insurance for the better â€" so paving the way for the continuing growth and development of our sector."Charles Phillipps, Insurance Institute of London Annual General Meeting, 29 September 2008

How will these changes make a difference for consumers?

Professionalism leads to better outcomes for customers because professionals have more knowledge and are able to apply it better.

  • A professional market is also characterised by integrity. Let us not forget that the purpose of the CII is to "secure and justify the confidence of the public" including improving the perception of the insurance market. But it is also the case that professionals, as nurtured by the CII, will develop the skills and capabilities that should enable them to flourish in a commercial environment.
  • Firms and leaders play a vital in "setting the tone" and operating in a professional manner that rewards not just their business but the sector as a whole.
  • If the general insurance market adopts these proposals, they will provide a spur to greater professionalism. That in turn will enhance consumer confidence and participation in our market place.

Shouldn't firms be carrying out these training and competence measures anyway in response to normal market forces?

Training and competence is a matter for individual firms, and indeed most firms do have excellent arrangements of this nature in place. However we believe a Declaration, a common standard, is the best way of kick-starting and propelling an industry-wide ethos of professionalism. We expect market forces to play a part in making its provisions more commonplace around the sector.

The Declaration sets out a view on what good could look like in terms of how firms could incorporate this ethos in their high level corporate activities. It also indicates how professional bodies like the CII could support this.

Have consumer groups been consulted in the development of this Declaration?

The CII has discussed this initiative with a wide range of stakeholders including consumer groups. However the provisions within the Declaration are about how the industry itself should get its own house in order.

The views of retail consumers were nevertheless a vital component of our research that led to the drafting of the Declaration. We undertook extensive original research of a number of stakeholders including retail consumers to understand the meaning of insurance professionalism from their perspective. This included focus groups of retail customers, and also commissioned a YouGov survey of chartered titles involving a sample size of over 1000 consumers. The research also used detailed retail market data on consumer purchasing trends conducted for us by Ernst & Young, and drew on other research conducted for the Chartered Insurance Institute by Deloitte & Touche and Populus.

Going forward, we will welcome consumer views as the process develops, and will be working with consumer groups in this regard.

2. Task Force and signatories

How was the composition of the Insurance Profession Task Force decided?

The Task Force was intended from the outset to provide a balanced representation of various aspects the diverse insurance industry, including insurers and brokers while keeping the group of a workable size.

Nevertheless we were constantly mindful of incorporating as wide a representation as possible. Therefore, during the course of its work, the Task Force spoke to firms of all sizes, from brokers to insurers, from provincial firms through to London market specialists, from UK household names to the largest international businesses. It also undertook original focus group research into attitudes towards the sector from customers as well as employees.

Has the FSA been informed of this Declaration?

Yes. We have kept the FSA updated on the Insurance Profession Task Force since its inception in early 2009.

3. Training and development

Why should training and development be considered such a high priority for firms in these trying economic times?

Training and competence is a matter for individual firms, and indeed most firms do have excellent arrangements of this nature in place. However we believe a Declaration is the best way of kick-starting and propelling an industry-wide ethos of professionalism. We expect market forces to play a part in making its provisions more commonplace around the sector.

Moreover, insurance is a service industry that relies heavily on the quality of its people. So investing in those people through training and development is a key to future success.

The Declaration sets out a view on what good could look like in terms of how firms could incorporate this ethos in their high level corporate activities. It also indicates how professional bodies like the CII could support this.

4. Professionalism within insurers and brokers

Are you expecting every insurer/broker to seek corporate Chartered status?

No. Signing up to The Aldermanbury Declaration should not be confused with Chartered status. The Declaration sends a powerful message to customers, staff and business partners that any organisation signing up to it takes professionalism seriously.

Beyond that the 'gold standard' of professional behaviour within financial services remains Chartered status and clearly there are significant benefit to attaining such a prestigious title as Chartered Insurer or Chartered Broker.

In a recent YouGov survey, the descriptor 'Chartered' commanded greater confidence among members of the public surveyed than any other options offered, including 'fellow', 'university degree', 'diploma' and 'certificate'. This was strongly reinforced in focus groups arranged by the Task Force, which demonstrate that chartered is widely seen as giving a powerful stamp of quality and customer focus.

5. Underwriting and claims standards

Why the focus on management teams?

Given that the senior roles within different organisations will not exhibit exactly the same responsibilities, we believe it's most practical at this point for our guidance to focus upon management teams. In many insurers, the teams whose activities will have most bearing upon the experience of external stakeholders (regulators, shareholders, retail customers, corporate customers) will generally be Underwriting and Claims. For this reason, stakeholders expect these management teams to demonstrate their capability in ways that are easy to understand and benchmark.

Why at least half? Why not all underwriters?

We do not believe it is necessarily appropriate for every single member of senior teams to possess insurance qualifications. Some may be qualified in other technical areas, for example as actuaries. For this reason, our Declaration should be viewed as setting the "minimum threshold". While many organisations will exceed it, and indeed some already stipulate that every member of senior teams in specialist areas must be qualified, the broader principle is that no firm should fall below the benchmark.

6. Management standards

Why is this so important?

We believe the qualifications of senior managers carry profound implications in such areas as organisation culture, staff development, appraisals and recruitment processes. We advocate that, for every person in a position of leadership, there should be a clear understanding of the competencies required for the role, and the implications these carry for professional standing â€" both the choice of professional body, and the pursuit of professional qualifications.