Ethical behavior is crucial to preserving not only the trust on which insurance transactions are based, but also the public’s trust in the insurance industry as a whole. Sometimes the push to act unethically comes from the consumer. How many consumers expect their insurance agents to falsify their applications or claims? You like your agent, he or she likes you, they really want to help you out, that’s just another conflicting loyalty. Over the years many have experienced unethical behavior by insurance agents. I have had them give their sales pitch to me and my family just to find out later that the product they sold us was completely wrong for our needs and way over priced. Greed seems to play a role and being ignorant of the industry adds to the issues. Sometimes agents get incentives or “kick backs” for promoting or selling certain products. The products being offered may not even be needed by the consumer but just because it creates a bigger paycheck for the agent they pitch it to you and you buy it. In the following pages we will look at areas that have been identified as critical ethical issues in the insurance industry today.
The central ethical issue in the insurance industry centers around money over customer support. Several facets differentiate those who see insurance as a vocation and those who view the profession as a means to a financial end. If an insurance agent enters into the profession without a strong ethical foundation he may quickly discover that people would rather not do business with him. Honesty in the insurance industry plays a central role in continued success and growth. According to the Insurance Journal, a single dishonest act by an insurance agent can spell doom for his business career and taint his reputation for years to come. Insurance agents and agencies must look at the value of selling clients effective...