Exploring Ethics in the Insurance Industry: A Symposium
On Friday morning, February 8, 2013, the Pedro Arrupe Center for Business Ethics and the Academy of Risk Management and Insurance cosponsored a symposium on Ethics in the Insurance Industry. The Arrupe Center is grateful for the leadership of Michael Angelina, the Executive Director of the Academy, in producing a successful symposium.
The event was one in a series of “Thought Leadership” panels organized by the SJU Academy of Risk Management and Insurance. The symposium was attended by approximately 150 people and represented a mix of insurance industry executives and Saint Joseph’s University students. Industry attendees were eligible to receive three continuing education credits; our students received an invaluable lesson on the ethical challenges faced by insurance industry executives.
The Symposium was comprised of three panel discussions with a total of thirteen executives from the insurance industry. The first panel discussion, “The Executive Perspective,” included Stephen Johnson, Deputy Insurance Commissioner of the Pennsylvania Department of Insurance; James J Maguire, Jr., Chairman of Philadelphia Insurance Companies; Kenneth J. LeStrange, Chairman of SAC Reinsurance and former Chairman, CEO, & President of Endurance Specialty Holdings, Ltd; and John Egner, Principal of Towers Watson.
The first panel discussion was intended to provide the audience with a general idea of the ethical dilemmas the panelists had encountered in their respective careers.
The second panel, “Life/Health Industry,” provided the audience more specific insights into ethical and moral issues the speakers had experienced in the Life/Health Insurance Industry. This panel included Todd Erkis, Director of Towers Watson and former Chief Actuary & Risk Officer of Lincoln Financial; David Harbaugh, Partner at Morgan, Lewis, LLC; Joseph Kenney, VP & Deputy General Counsel of Independence Blue Cross; Robyn Label, VP, Chief Ethics & Compliance Officer at Penn Mutual; and F. Mark Lastner, General Auditor & Chief Officer at CIGNA Corporation.
The third “Property/Casualty Industry” panel discussion was also focused more specifically on ethical situations the panelists have faced in that sector of the insurance industry. The third panel consisted of Marc Armstrong, Manager Director at AON; Anita Devan, Senior Vice President and Regional Manager at Zenith Insurance Company; Debbie Rodgers, Senior Vice President of Global Risk Management at ARAMARK; and Michael Daly, Global Practice Leader at XL Insurance America, Inc.
The speakers in all three panel discussions explained the importance of ethics and talked about how it has influenced their decision-making. In particular, panelists emphasized the role of actuarial judgment in decisions where there is no simple, correct answer and where participants in the decision may have vested interests in the outcome. Speakers also noted that because of the long time between booking premiums and paying claims, the insurance industry needs to avoid the short-term perspective common in many C-suites today.
Panelists also discussed the challenges posed by the implementation of the Sarbanes-Oxley law. Some speakers understood industry complaints that the law may create burdensome compliance requirements but they nonetheless saw the law as an opportunity to move beyond a mere compliance culture to an integrated corporate ethics culture. All agreed on the need for accountability and transparency as well as on the importance of consistency in corporate leaders’ communications and actions for creating a culture of values within the organization.
Michael Angelina asked each panel what advice they would give the students in the audience. A number of panelists responded with advice that students should admit mistakes and correct them rather than attempting to cover them up. Perhaps the most important advice was that students should be willing to give up a job if they find themselves in conflict with corporate culture and values. “Don’t put a price on your integrity” was a major takeaway message for students.