4th July 2023
As an integral part of the financial services sector, the insurance market is susceptible to rapid change and continuous evolvement.
This means keeping up to date with sector ongoings and the skills in demand is crucial for any insurer or broker wanting to keep their business afloat and ahead of the competition. Not only that, but keeping your skills and knowledge refreshed is an FCA requirement introduced to raise professional standards within the industry.
In their pursuit of increased professionalism, the FCA made Continuing Professional Development (CPD) a requirement for all qualified members of professional bodies.
But how does this feed into an insurance firms operational resilience strategy? Let’s take a closer look.
The insurance market is volatile, which means expecting the unexpected should be a high priority on all insurers’ radars. But to do that with minimal disruption, a business needs to be operationally resilient.
The concept of operational resilience was introduced by the Bank of England, FCA and PRA back in 2019 in a bid to improve the financial services sector’s ability to prevent, adapt and respond to, recover, and learn from operational disruptions. They laid out the proposals in their Operational resilience: Impact tolerances for important business services policy statement.
Continually reviewing the processes, policies, and plans you have in place to prevent and handle these disruptions is crucial to remaining operationally resilient. Without this, you don’t just risk reputational, customer and financial loss; but you also risk creating demotivated, burnt-out staff and potentially heightened attrition rates.
The FCA introduced CPD as a regulatory requirement for all insurance providers, intermediaries, and professionals on 1st October 2018. The initiative came off the back of the Insurance Distribution Directive (IDD), with an aim to enhance consumer protection when buying insurance and to create a level playing field between insurance companies.
With insurers being trusted with people’s money and ultimately, their livelihood, it was imperative for the regulatory body to ensure professionals in the sector are always in a well-informed position to give advice. And while learning and development is enshrined in some company cultures, there needed to be a way of ensuring all insurance professionals were dedicating a specific amount of time to updating their knowledge and skills in line with changes and advancements in the market.
As a result of the CPD requirement, anyone selling insurance must complete 15 hours of CPD per year as a minimum. This applies whether that’s to maintain their license or to uphold professional qualifications.
Despite IDD’s requirement of 15 hours of CPD completed per year, the more you encourage your workforce to develop themselves, the more your business gains. With a continuous stream of knowledge, you ensure your team is aware of changes or threats, allowing you to make any necessary adjustments to your operational resilience strategy efficiently.
Here are five ways you can work to encourage a continuous learning culture:
A learning culture can only be built if a hunger for knowledge is there. If your employees are being asked to focus on areas they don’t have a particular interest in, there’s every chance you won’t be able to achieve this culture.
Instead, recognise that your staff will have different strengths and interests (even those who work in similar roles) and allow them to plan their own professional development—they can even share their newfound knowledge with their colleagues. We all have so much to learn from each other and this helps to foster a collaboration—a skill which is crucial for the success of any operational resilience strategy.
Insurance is an incredibly fast-paced sector to be part of. So, to keep up with the latest demands of the market, it’s crucial that you’re giving your employees enough time and the right resources to do so. Whether that means allowing study days or blocking out certain parts of their schedules as dedicated team training time.
And with LinkedIn’s Building the Agile Future report highlighting that skill sets for jobs have already changed by about 25% since 2015, with this number expected to double by 2017, it’s clear learning and development is going to be crucial moving forwards.
Dry, outdated, and text-heavy training resources can have the opposite effect and make your teams less likely to dedicate any extra time outside of their CPD to learning and development.
Consider switching the learning experience from purely instructor-led, to blended methods that integrate instructor-led modules with those that are online. This can help to make training much more engaging, and means your employees are more likely to absorb the necessary information. And when your staff are more informed, they’re better equipped and positioned to contribute towards operational resilience.
Although qualifications on their own can’t predict how experienced an insurance firm is, they do indicate that a business has a certain level of understanding about key concepts, processes, emerging trends, and terminology within the sector. Plus, they add credibility to your business.
While there will be some compulsory qualifications the whole insurance community will be required to have, encouraging them to go the extra mile and advance their qualification level can be helpful for boosting your operational resilience. This is because an understanding of more complex topics could mean they have new ideas about how to improve your operational resilience strategy.
Keeping your workforce and stakeholders in the know with what’s going on both internally and externally that could affect your operations is crucial for continually improving your operational resilience.
When your workforce and stakeholders aren’t aware of potential threats, they might not take things as seriously as they need to or be more likely to forget to implement measures that need to be taken. Plus, it could remove the opportunity for your employees to share their ideas and help you to secure your business and protect your customers further.
CPD and continuous learning in general are important contributors to your company’s overall governance, risk, and compliance framework. When you build a learning culture where your employees thrive from developing their own knowledge and sharing this with their colleagues, you unlock hidden potential. As well as making your business more attractive to new joiners, helping with retention of staff, you also boost your operational resilience strategy.
To learn more about why ignoring significant financial risks, such as: regulatory fines, revenue damage, and increased costs could threaten an organisation’s long-term survival, download our white paper.
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