In the News
UK Regulators Warn Insurers Over Harassment, Diversity
The Financial Conduct Authority says poor culture in financial services impacts consumers and the market itself.
- Terrence Dopp
- February 2020
Leaders of commercial insurance businesses in the U.K. must take steps aimed at curbing so-called non-financial misconduct in the market or face consequences, the country's Financial Conduct Authority said in a letter to chief executives.
Jonathan Davidson, executive director of supervision, retail and authorizations at the agency, wrote in the Jan. 6 letter it will look at how firms handle discrimination, harassment, victimization and bullying as components of internal culture. The FCA also called for promoting diversity and inclusion within the insurance ranks, according to the letter.
A senior manager’s failure to take reasonable steps to address non-financial misconduct could lead us to determine that they are not fit and proper.
Financial Conduct Authority
“A senior manager's failure to take reasonable steps to address non-financial misconduct could lead us to determine that they are not fit and proper,” Davidson wrote in the letter.
The FCA didn't specify which companies received the letter.
The warning comes amid heightened attention to the issues within the London insurance culture, which were first raised last March in a Bloomberg Businessweek article that alleged daytime drinking and sexual harassment within the bedrock exchange.
In November, Lloyd's launched its #SpeakUp campaign, aimed at addressing a culture survey that found 38% of respondents didn't know who to raise concerns to in cases of wrongdoing. Just 41% said someone would listen and take concerns seriously, according to the September survey, which was billed as the largest-ever at the market.
John Neal, chief executive of Lloyd's, said at the time the market is fully committed to acting on reports of inappropriate workplace behavior. In the letter, Davidson said the FCA will focus on leadership, purpose, firms' approaches to rewarding and managing people, and governance. The manner in which a firm addresses any misdeeds is indicative of its culture, he said.
“Poor culture in financial services can lead directly to harm to consumers, market participants, employees and markets,” the letter said. “We view both lack of diversity and inclusion, and non-financial misconduct as obstacles to creating an environment in which it is safe to speak up, the best talent is retained, the best business choices are made, and the best risk decisions are taken.”