Over the past year we have witnessed a new era of engagement with international governments and regulators, as the Chartered Insurance Institute (CII) and Personal Finance Society (PFS) operate under a royal charter to raise public confidence and trust in the respective sectors.
I recently visited several countries across Asia and the Middle East to promote and implement CII support programmes.
Why regulate advisers?
The UK framework is respected around the world and there is a universal acceptance among their respective regulators of the value of UK qualifications and the importance of raising professional standards to address consumer trust concerns.
Negative public perception can often be influenced by a small minority, tarnishing the reputation for the majority and incurring increased regulatory scrutiny, rules and cost.
Such adverse reputational impact, coupled with increasing regulatory cost, will ultimately hit the profitability of firms and lead to poor unintended consumer outcomes.
Regulation is an effective force for improving public confidence and engaging markets, as are appropriate professional standards, adherence to a voluntary code of ethics, commitment to continued professional development and to the right cultural behaviours.
Most developing countries already have a minimum set of qualifications in place, although some have not extended them beyond a very basic level for financial advisers, and insurance brokers are not yet included.
The CII has members in 150 countries and has been particularly active during 2018 in the UAE, Hong Kong, Singapore, Malaysia and Bangladesh; as well as the UK, Jersey and the Isle of Man, all of which are considering how to address key public trust issues through the raising of professional standards or joint consumer awareness initiatives.
Singapore
Each country is at a different stage of evolution. Take Asia, for example, where Singapore is setting the pace and has a raft of measures in place dedicated to raising professionalism and protecting consumers.
Singapore already runs three CII-accredited qualifications covering financial advice, health insurance and general insurance. Helping to facilitate this is a shared ethos between the regulator, the insurance and broker associations and the numerous companies that operate in the insurance/financial services sector. Best practice is pursued without any ‘big brother’ interference.
Indonesia and Malaysia are also making great progress, but it is fair to say India and the Philippines have a way to go and represent something of a challenge due to their prevailing cultures.
Malaysia
Malaysia alone has more than 16,000 students attending UK universities every year, and the objective is to help many of them to recognise the value of adding professional qualifications alongside a degree as a differentiator to improve employment opportunities, especially one that carries the credibility of an internationally recognised chartered body.
The CII has introduced a professional certification and development programme for appointed representatives in collaboration with the Labuan International Insurance Association and the Malaysian Institute of Insurance.
With the growth of Malaysia’s financial sector anticipated to be up to 11% annually, it is reckoned that during the next 10 years the workforce will need to expand to around 200,000 – an increase of 56,000 from the current 144,000 employees.
UAE
Elsewhere, the CII has a number of well-established collaborations with international regulators, including the UAE where it is working closely with the Insurance Authority, which is currently putting 4,000 Emiratis through the CII’s qualifications process.
The authority was set up just over 10 years ago and last year launched a free ‘My skills’ initiative, with the support of the CII, to train/qualify UAE nationals in all disciplines and fields of insurance.
Hong Kong
In Hong Kong, where the CII has an office, there is a series of certifications for advisers working in general and long-term insurance and securities, in tandem with the Hong Kong Insurance Authority.
With an estimated 64,000 individual insurance agents and China right on its doorstep, the regulator is actively promoting Hong Kong as a regional insurance hub.
Bangladesh
Another major emerging market is Bangladesh, which has approximately three times the population of the UK and is rapidly emerging as a major market from a financial services perspective.
In a formative visit organised by the CII’s Mumbai office – I spent a week there earlier this year – during which time I had frontline meetings with the minister of state, the minister of finance, the executive chairman of the regulator, the dean at East West University and the University of Dakar and presented to students at both, various insurance trade associations, the chairman of Green Delta Insurance Company and the chief executives of key businesses, concluding with a headlining insurance sector roundtable at the head office of The Daily Star national newspaper.
Such a packed schedule demonstrated an enormous appetite for UK levels of international training and excellence. It was an indication of the importance they attach to their rapidly developing insurance profession and the eminence with which they regard the UK template.
Securing public confidence and trust is a common objective for us all and it is essential that we work with regulators and governments as a united profession.
Further reading:
Major changes outlined for Hong Kong intermediarie
By Keith Richards, managing director of engagement, Chartered Insurance Institute, and chief executive, Personal Finance Society
