Industry needs to communicate better: Levene

The insurance industry needs to communicate better, not only in terms of full transparency with clients, but also working closely with regulators, Lloyd’s chairman Lord Peter Levene told a Philadelphia audience Monday night.
Speaking to business leaders at the Philadelphia Club, Levene says insurers need to tackle issue such as the recent controversy over broker compensation by taking a collaborative approach with regulators, such as Lloyd’s is currently undertaking with the U.K. Financial Services Authority (FSA) to deal with issues of business efficiency in the London market.
“We need to move away from a strictly rule-book mentality, avoiding the creation of yet more paperwork and bureaucracy,” Levene says. “And in its place, we can work with our regulators to develop and require adoption of ethical principles of behavior.”
He adds it is even more crucial to learn to communicate better with customers, stressing disclosure and transparency in relationships. “If we are to retain the confidence of the key play in all of this – the customer – we need full disclosure and complete transparency about who is doing what exactly, for whom, on what terms and at precisely what cost.”
This is the case not just in insurance, but in financial services as a whole, with investment banking and mutual fund industries also facing investigations in the past few years. “It [financial services] has been left with a tarnished image in the minds of consumers, regulators and commentators. As a sector, the very business of financial services is based on trust, and we can no longer be in doubt that governance and proper conduct must take their place at the top of the agenda.”