Insurers are unclear about what conduct risk strategy means in practice
Over 55% of respondents do not yet have a clearly defined conduct risk strategy in place within their organisation, a survey by PwC has found.
The survey suggests that insurance companies are concerned about what conduct risk really means in practice, including both direct and B2B and B2C operating models.
Over half of organisations still face the challenge of successfully defining conduct risk appetite, and see this as the biggest challenge to their organisation.
In addition, 67% of organisations have not yet communicated its conduct strategy with employees.
However despite the lack of defined strategy, over two-thirds believe that their organisation is conscious of Financial Conduct Authority expectations around conduct risk and that work is being done to build a fully competent strategy.
PwC insurance director Ian Woodhouse said: “Insurance companies must focus on their customers to embed conduct risk in their organisations. The conduct agenda is a great opportunity to get closer to their customers and help rebuild consumer trust in financial services. This can be done by looking at the full customer journey and the processes involved - from marketing to point of sale to product provision, and placing appropriate controls around these.”
PwC insurance partner David Taylor added: “Employee engagement is clearly a key to success. A lot of the work that has been done so far has been done from the bottom up, and conduct risk needs governance. There is a clear expectation of how you manage success, and regulators are asking direct questions of the board. Those who make the most progress are those who recognise the regulatory drivers which affect everyone in the business. This is a firm wide role - it’s very dynamic.”
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