CII Annual Report Version 2 by Redactive Media Group

Your CII: Building a United Profession Chartered Insurance Institute Annual Report 2019

Contents

About us

Contents About us

Our priorities in 2020

Public trust

Corporate programmes We also work with employers to support staff in their professional development through our range of company-wide training solutions. Our team works strategically with organisations to create training and development programmes that are driven by business needs.

Our performance

International matters

We are a professional body dedicated to raising standards in our united profession to build public trust in the insurance and personal finance profession through relevant learning, insightful leadership and an engaged membership. We have more than 129,000 members all over the world who commit to professional standards by maintaining continuing professional development and by observing a published Code of Ethics.

Building a united profession

President’s statement

Professional qualifications

Our market

Our societies

CEO’s update

Our people

CII celebrates

Our executive team

Affiliated and local institutes

Summary of financial accounts

Engaged membership

Our membership

Building a trusted profession

Following the UK government’s announcement in March 2020 that all non-essential contact and unnecessary travel should cease, we put in place plans to assist members and staff during the ongoing coronavirus outbreak. We postponed April written examination sittings that were due to take place on 20, 21 and 22 April until October. At the time the annual report was published (June 2020) we continued to monitor and review the situation in line with government guidance. For CII staff we have followed the government’s guidance and were working from home. As a consequence of the agile working practices introduced two years ago, all members of staff are equipped to work remotely until government advice changes. The CII has taken this action because our priority is ensuring the health and safety of our staff and members and providing the profession with ways to continue to deliver their services to the public. Our focus will be on providing digital content for our members to support CPD requirements during this period and continuing to issue guidance to members in their vital role helping members of the public.

The Chartered Insurance Institute

We provide professional qualifications from essential core units to advanced studies, and both aspiring and established professionals can choose the learning pathway that fits their job role and career aspirations.

Chartered status is a symbol of technical competence and professional standards which demonstrates that you are at the forefront of your profession and serves as a mark of trust. As a Chartered body of more than a century’s standing, the CII grants Chartered titles to individuals and organisations that uphold the Chartered ethos.

Our institutes

Our vision: “Working together, as a united profession, we will drive confidence in the power of professional standards” Coronavirus outbreak

Chartered

£45.2m Total revenue for the year was £45.2m, a £2m increase on 2018

Our members can access 56 local institutes across the UK and 37 affiliated international institutes spread across the globe, so when you become a member of the Chartered Insurance Institute (CII), you also become a member of an institute that is usually close to where you live or work. These institutes are an essential part of our offer, providing events on relevant subjects, CPD training, networking opportunities, career guidance and local news to our members.

members

local institutes in the UK

affiliated international institutes

Annual Report 2019

We recognise that individual segments within our membership have specific needs from a professional standards perspective and this is the role that our Societies play. The core objectives of our Societies are to raise standards through a focus on professional ethics and culture, good practice guidance, thought leadership and a dedicated programme of continuing professional development.

Building public trust in our united profession Our purpose is to support our members to… To help the public to…

129k

Our Societies

By providing our members with…

Which we measure our success in delivering by…

More member professionals to serve the public Standards Professionalism Trust

Financial resilience to the risks in life – products, service and advice For people and businesses – assets, income, health and wealth

Engaged Membership Valued services Influential voice Lifelong journey

hartered members C Member numbers Member engagement Public trust

Whilst ensuring that our behaviours are…

Annual Report 2019

Culture Relevant Modern Diverse

Insightful Leadership Ethics and conduct in the modern world Insuring futures Talent and diversity International outlook

Relevant Learning Respected qualifications Continuing professional development Reflects modern lifestyles and careers

Perception of Chartered professionals Promoting the profession Diversity and inclusion

ptake of new units U International presence Qualification progression

Digital fulfilment

Employee engagement

Values We seek excellence We are visionary We are an open community

Surplus

Balance sheet

Operating model International “Made Simple” Financially independent

The Chartered Insurance Institute

Our market

Our market: key facts

Value of global direct premiums

largest insurance market

in Europe and the

fourth largest

6.5% The insurance sector comprises

6.1%

Source: ABI, 2019

The UK has the

in Europe and the fourth largest in the world, behind the US, China and Japan, and leads the way in insurance and financial services expertise, professionalism and standards, delivering financial and non-financial benefit in the process. Our profession makes a hugely positive contribution to the global economy and to society by helping people and businesses grow, while safe in the knowledge that their risks are protected and their investments are in good hands.

Source: Swiss Re, 2018

Source: ABI, 2019

in 2018, a 19% increase from 2017 Source: Association of British Insurers, 2019

80%

420,000

of customers who purchased a pension, protection or other long-term insurance product had some form of advice

Number of people employed in the UK insurance and personal finance profession Source: CII, 2019

Insurance profession contributed

£29.1bn to the UK economy

71%

of consumers took independent advice when selecting a pension product, as did 67% of consumers who selected protection products

The Chartered Insurance Institute

MORTGAGE BROKERS

14,052 FINANCIAL ADVISORY FIRMS

5,246

MORTGAGE BROKING FIRMS

1,532

Small firms remain a significant part of the intermediary sector. Nearly nine out of 10 financial adviser and mortgage broker firms have five or fewer adviser staff Source: FCA, June 2019

Source: ABI, 2019

Source: ABI, 2017

26,677

Source: ABI, 2019

Source: Swiss Re, 2018

£266.6bn

FINANCIAL ADVISERS

in the world

of global GDP

The UK insurance market had a total premium income of

82%

Source: Swiss Re, 2018

The UK insurance and long-term savings sector is the largest

The UK share of the global insurance premium market

of personal property insurance is purchased directly by consumers

highlighting the profession’s commitment to put the public at the heart of what we do

of personal motor insurance and

£4tn

The global insurance market was worth more than $5tn (£4tn) in 2018 and represents more than 6% of the world’s GDP.

61% 30%

Claims acceptance rates for private motor, domestic property and travel insurance were all greater than

Annual Report 2019

The Chartered Insurance Institute

CEO’s update

Update from the CEO There is never an end to change in a dynamic sector like ours, but it is important to take stock and hit deliverables. In 2016, the Chartered Insurance Institute’s strategic manifesto saw us commit to making ourselves more

members. We are the professional body for a diverse sector, crucial for consumers and society through all areas of insurance

AGM in 2019. Relevance is just as much locality- specific as function-specific, so the combination of our Local Institutes

relevant, modern and diverse and to deliver relevant learning, engaged membership and insightful leadership to our united profession. This is all to empower “more member professionals to serve the public” and through this build public trust. In this update, I will reflect on our journey as an organisation during the last four years and outline the progress we have made in 2019. In 2016, our primary focus was to increase our relevance by convincing our stakeholders that we had an important role to play in the future direction of the profession, not simply in providing qualifications. By placing our Royal Charter of “securing and justifying the confidence of the public in insurance and related financial services” at the core of all our activity, in the face of some testing times for the profession, I believe we have focussed on the right elements to drive meaningful outputs. Relevance, by its nature, is a moving target driven by events. This has been particularly the case in the last four years, with major political, social, environmental and cultural shifts during the period. We are in the midst of a major example of this currently, with the coronavirus pandemic resulting in widespread socio-economic disruption. Part of our challenge as the professional body, is to have a clear role at the core of the debate, not pontificating from the side lines. To be “in the room” you have to be an influential voice with a real constituency. This is you, our

and personal finance. This is a challenge to relevance, which can only be tackled through your knowledge, professionalism and engagement with us. Therefore, in 2019 we launched two new Societies – the Society of Claims Professionals and the Society of Underwriting Professionals – taking the total number of our Societies to five. The launch of our Societies is an acknowledgement that individual segments within our membership have specific needs and interests. The Personal Finance Society has proved very effective for both relevance and influence and we want to build on this across insurance. This is in addition to the vital local, social and continuing learning role played by our wonderful volunteer local institutes and regions. We are incredibly grateful to the support from our Institutes all over the UK in achieving our new National Forum and their positive approach to the other governance changes passed at the

and our Societies brings together two crucial components. We have a third group of vital stakeholders for membership and influence and we must be relevant for them too – our corporates and employers – especially those holding our Corporate Chartered designation. Our Charter marks are our most prized award as they allow firms and individuals to make a public declaration of commitment to technical competence and professional standards. During 2019 we have implemented the results of our Corporate Chartered consultation, including the refresh of the “Chartered Ethos.” This work has been very well received. We will be running a similar review of individual member Chartered status in the coming year.

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Sea change Professional bodies are coming back into their own amid a sea change in the culture of the profession to a more ethical,

Professional bodies are coming back into their own amid a sea change in the culture of the profession to a more ethical, customercentric approach to business Annual Report 2019

customer-centric approach to business.. The Financial Conduct Authority in particular is talking more than ever about culture purpose and the need for “professionals” and “professionalism”. We have also clearly seen this shift in the diversity arena, with movements such as #MeToo exposing cultures driven by bad behaviour and arrogance. In my experience, the vast majority of people were already behaving ethically, it was just that their voices had been pushed to the background. However, if we are going to lead the debate we also have to get our own house in order from a diversity viewpoint, and I was very fortunate to inherit an organisation with a proactive attitude to improving internal culture. Our work in promoting diversity internally has continued. We are signatories of the Women in Finance charter, we are assessed by the Stonewall Workplace Equality Index, and we are Investors in People. We improved the gender pay gap across the organisation, with a 1.9 percentage point reduction in the mean pay gap in the year, and an over 13 percentage point reduction in the last two years. We will maintain this focus going forward as well as looking at our black, Asian and minority ethnic (BAME) and international representation. This is visibly absent from our Board, Committees and senior

management level, albeit, good at the heart of the organisation.

Trust So, circling back to public trust, we recognised from the beginning that you will not improve trust by talking about it, you have to make change. This is the purpose of our Insuring Futures programme, focussed on building access and relevance for underserved sections of society. Through our Insuring Women’s Futures taskforce, we identified the perils, pitfalls and moments that matter in the life journey of women. The output from this work in the year are two pledges, that look at promoting financial resilience and inclusion for employees and externally for customers. To date, we have 20 of the top names in our profession committed to these pledges. We have a significant opportunity to build public trust internationally, particularly given the interconnected nature of the world we live in. Outlined in this report are examples of the excellent work that is already taking place with regulators and affiliated institutes overseas. We believed we had the right internal ingredients to capture the prevailing zeitgeist and so we launched the Consumer Insurance Public Trust Index in 2018, which we have refreshed this year with far more granular detail for our members to understand and to help them interpret their customers’ views. We feel we have achieved improved relevance and engagement since 2016, but there is still much to do. However, with a culturally and operationally sound internal infrastructure and a supportive profession we have the right building blocks in place to continue our work through our members to drive change and improve public trust.

Sian Fisher CEO of the Chartered Insurance Institute

The Chartered Insurance Institute

CII celebrates

CII celebrates Public Trust Awards at the CII Presidentâ&#x20AC;&#x2122;s Dinner National Forum Awards

Exams Awards

Personal Finance Society Winners Insuring Womenâ&#x20AC;&#x2122;s Futures Launch

The Chartered Insurance Institute

Annual Report 2019

The Chartered Insurance Institute

Our performance

Public Trust

0-8-1

Every year the CII’s Public Trust Index surveys 1,000 consumers and 1,000 small businesses to find out how important nine measures of trust are to consumers; and how well insurers are meeting their expectations. We then group our findings under three headings, “maintain” “improve” and “urgent action”. In 2019, there were none of the measures in “maintain”, 8 in “improve” and one, loyalty, was in the “urgent action” space. The aim over time is to move the measures into the “maintain” space. (2018: 0-8-1)

Relevant learning

18,577

Revenue per full-time employee (2018: £191k)

Insightful leadership

c.53,000

Pride of place

74%

People attending CII events that promote the profession to new talent. (2018: c.62,000)

Made simple

£191k

Total members (2018: 127,480)

This was not measured in 2019. Employee engagement was 74% in 2018 (2016: 68%) as measured through our employee engagement survey.

A great big world

11%

23,373 3

129,151

Building a united profession

Total number of individual members holding one of the CII’s Chartered titles: Chartered Insurer; Chartered Insurance Broker; Chartered Insurance Practitioner; Chartered Insurance Risk Manager; Chartered Insurance Underwriting Agent and Chartered Financial Planner. (2018: 23,391)

Engaged membership

Pride of place

100%

In 2018, the CII more than met all four of the diversity and inclusion criteria (strategy, leadership, HR process and other) in a PWC reputational risk audit, with two measured at “advanced” and two as “leading”. This was not measured in 2019, however, we improved the gender pay gap across the organisation, with a 1.9 percentage point reduction in the mean pay gap in 2019 and a more than 13 percentage point reduction in the last two years. 9

Percentage of group revenue from outside the UK. (2018: 11.2%)

Service effectiveness

79.3%

We have adopted the Institute of Customer Service (ICS) satisfaction index (UKCSI) benchmarking customer survey results. Our latest position was 79.3 (2018: 75.3), versus a UK all sector average of 77.1. (2018: 77.9)

Volume of new individual learners purchasing study materials, exams or coursework with no known purchase history for the previous five full calendar years. (2018: 17,166)

2019 performance against our strategic measures

We introduced 10 strategic measures in 2017 to demonstrate the impact of our transformation programme. Since then, we have updated these on an annual basis to reflect the progress that we are making

Annual Report 2019

The Chartered Insurance Institute

Building a united profession

Building a united international profession

Paula Hodson FCII Chartered Insurer, Director of Education and Development, The Insurance Institute Ireland (III)

The CII has a significant international presence with 11% of revenue coming from non-UK operations currently, and around 12,000 international members. It has achieved this through building strong links with local regulators and affiliated institutes, leveraging the respect that the CII and the UK market has internationally. Notable amongst these achievements is our partnership with the United Arab Emirates Insurance Authority, which has resulted in both UAE nationals and expatriates attaining CII qualifications since its inception in 2016. Building a united international profession is only possible when organisations such as affiliated institutes, regulators, employers and educational establishments work in close partnership with one another, and with the CII, around the world. Their efforts deserve active celebration and a high profile. In 2019, the CII published a major report entitled ‘A World Of Risk: Building A Trusted International Insurance Profession’, to showcase activity from across the continents.

This was the first time the work of our affiliated institute network had been brought together in one place, and the result is a testament to their growing significance in delivering a public interest benefit. The 2020 edition will introduce the ‘Circle of Trust’ concept – reflecting the eight themes that are vital if trust is to be secured.

A World of Risk In the strategic manifesto, the CII acknowledged the need to reach out to new markets to build public trust internationally. The strategy to achieve this will be agreed later in

The Chartered Insurance Institute

2020, with further information in our next report. However, we wanted to provide an update on the current status internationally, through highlighting our work with our affiliated institutes; hearing first-hand from the heads of each of our international offices; and understanding the potential from our new International Director, David Thompson. In this section, we talk to some of our affiliated institutes to understand how the CII is working with them to provide quality learning and qualifications while sharing our experience of good practice internationally.

Annual Report 2019

“The Insurance Institute of Ireland (III) was formed in 1885. As Ireland was part of the Union of Great Britain & Ireland up to 1921, the III was no different from any of the other local institutes of the CII up to 1912. The III then gradually became affiliated to the CII to reflect the growth of a domestic Irish insurance profession and the gradual lessening of ties between jurisdictions, especially as Irish laws and regulations evolved independently. Traditionally, the III was an Irish clearing house for individuals in Ireland pursuing CII qualifications, but this changed due to Ofqual stipulations meaning these individuals now pursue the ACII directly with the CII. Many UK insurance organisations had offices in Ireland, and it was these close business links that encouraged Irish insurance professionals to pursue qualifications offered by the CII in Ireland up until the Central Bank of Ireland issued the minimum competency code in 2007. The code requires all insurance professionals providing advice to insurance customers to hold minimum qualifications that are on the Irish national framework of qualifications. The III has always valued its relationship with the CII and as the III has grown more independent,

Annual Report 2019

particularly since the 1970s, this relationship has continued to grow. Holders of the CII’s ACII and FCII are afforded dual membership of the CII & III and by and large, they avail the bulk of their membership services from the III as a result of the Central Bank of Ireland Minimum Competency Code. Very strong relations exist between the CII and III on every level. The III licences several products from the CII for use towards III programmes that must adhere to the regulatory regime in Ireland, which differs from the UK’s requirements. The III’s access to, and use of, CII services ensures III products continue to be mapped towards them in terms of entitlements to CII Recognition of Prior Learning (RPLs) and credits, meaning the III continues to promote CII qualifications in Ireland. This recognises the CII’s ACII and FCII as being the gold standard in insurance technical knowledge over and above the mandatory Irish regulatory requirements which III members must comply with.”

Jeanette Lim President, Singapore Insurance Institute (SII) The link with the CII has been ongoing for more than 13 years, during which time we have gained significant learning and sharing opportunities, as a result of our shared focus to build and improve the professionalism in the insurance and

financial services profession. We have regular interactions and discussions with the CII and in recent years, we have started collaborations where the SII and CII work jointly to organise events and activities for the sector, bringing together like-minded professionals with opportunities of development and networking. In the last year, there have been increased interactions with the CII including meetings with Kenny Siu, Regional Director Asia Pacific, in Singapore to plan the way forward and discuss how we can collaborate to bring our profession to the next level. As a result of the partnership, we have seen an increased exposure of the SII branding across the profession in Singapore and beyond. And with these cross-border interactions, many of our members and friends are able to stay connected with us, regardless of their location in the world. In 2020, we plan to launch our SII/ CII series to our members and friends where we invite experienced speakers to share their area of expertise with a diversified range of topics from digital impacts, underwriting and claims trends with regards to specialised product classes.”

The Chartered Insurance Institute

Affiliated and local institutes

Our international network of institutes

OUR STRATEGY IN ACTION

International growth is a key part of our strategy, delivered by our 37 affiliated international institutes, the Institute we run in Hong Kong, and our three international offices. David Thompson, International Director, talks in more detail later in this year’s report about the current status of our international business, however, here we gain the insights of our three Regional Directors on the role the CII currently plays and the potential for growth in each of their regions.

Our partners: the institutes In this section we highlight how the CII works with its local institutes and affiliated institutes internationally to meet the needs of the profession. Our local institutes When you become a member of the CII in the UK, Channel Islands and the Isle of Man, you also become a member of a local institute, which is usually close to where you live or work. These 56 local hubs provide a huge range of member services including technical, market and regulatory CPD events; soft skills and business-related training, networking activities student career guidance, networking activities, local news and market information. Our focus with the Local Institutes is on delivering a valuable membership experience through a meaningful engagement proposition. While our Societies provide digital content on a sector basis, our Local Institutes are focussed on the face-to-face delivery of member services. In the last couple of years, our principal aim has been to improve consistency and quality to ensure that we are delivering a high-quality product regardless of a

Kenny Siu Regional Director, Asia Pacific

member’s location. For example, in 2019, in order to support our Local Institutes, we launched the Professional Focus programme – a centralised CPD proposition for the general insurance sector. The programme was made up of seven conferences across the UK each providing more than four hours of CPD to our members. The programme will be repeated in 2020 and we will continue to explore areas where we can offer more centralised support to benefit our members.

“The Hong Kong Institute merged with the CII in 2015 to form the CII Hong Kong. Since then we have worked to replicate the CII model in the UK by dealing directly with members, regulators and government bodies. This has been helped greatly by the high regard with which the CII is viewed by insurance professionals throughout the Asia Pacific region, which has been further supported by growing our offer to firms, with continuing professional development (CPD), online learning and qualifications. Our growth plan is based around localising our offer and building closer relationships with regulators; institutes and trade association; corporate and distributors; and universities. In the last year, for example, we have had very constructive discussions with Chinese government officials; secured partnership agreements with various insurers and training institutes; began localising our courses; developed a Chinese version of our website and developed a WeChat payment gateway in Hong Kong for the China region. Our focus in 2020 is to continue to build relationships, while growing membership and engagement for the Personal Finance Society, particularly in Hong Kong and China, as well as exploring and securing new business partners in the region.”

Victoria Royle Past President of the Insurance Institute of Manchester “As an institute, we gain hugely from our relationship with the CII. Our contacts at the CII work to give us the benefits of the Institute’s infrastructure and knowledge framework, which gives us the time to get on with building supportive networks in our local area. The Network Conference, for example, is a fantastic opportunity to learn from, and share best practice with, our peer institutes.”

The Chartered Insurance Institute

Annual Report 2019

Gaenor Jones

Sainesh Dar

Regional Director, Middle East and Africa

Regional Director, Central and South Asia

“Our main clients in the region are the United Arab Emirates, Insurance Authority (UAE IA) and the Financial Academy in Saudi Arabia who are the training arm of the Saudi regulator, Saudi Arabian Monetary Authority (SAMA). We are working very closely with them both to help support their initiatives and create public awareness of the CII brand. We also work with many training providers, brokerages and insurers throughout the region. As the United Arab Emirates

“The development of the CII’s activity in our region is focussed on our Royal Charter of working to “secure and justify the confidence of the public” by providing professional courses and learning support to students, corporate clients and partners. In 2020, Central Asia also became part of our region, therefore we are now responsible for 13 countries with a particular focus on India, Pakistan, Sri Lanka, Bangladesh, Uzbekistan, Azerbaijan and Kazakhstan. Our business is with three main

and most of the Gulf Co-operation Council (GCC) states do not have any minimum qualifications in place to give financial advice, our effectiveness is currently limited, however, this is a fantastic position to be in when qualifications are mandated as we will be there from the start. This is why we will continue to work hard to make the public aware of our offering and how we can support them. We currently work very closely with the UAE IA and SAMA and are hoping that, going forward, the need for minimum qualifications will become more urgent and ideally mandated. In the last year, we have signed a Memorandum of Understanding (MoU) with The Financial Academy, which has now led to a full contract; we have tendered for several other projects with SAMA and the Financial Academy; have signed a new three-year exam and training contract with the UAE IA encompassing a new leadership programme, Junior Zone, awareness programme and CPD programme; and we have signed a tripartite agreement with Dubai International Financial Centre (DIFC), Lloyd’s of London and the CII to provide training for the DIFC Academy. Our regional focus for 2020 is on continuing to build our relationships with the UAE IA, The Financial Academy and the DIFC.”

communities – corporate clients; individuals and strategic partners; educational institutes and distribution partners. In general, among corporate clients and individuals in the region, the CII is held in high regard, with a more mixed pattern among government bodies and regulators. Our plan in the region is to work alongside the affiliated institutes; build close relationships with the regulators and government bodies and onboard new corporates and education/distribution partners to promote the CII proposition. As of the end of 2019, we have 30 active corporate relationships in the region; 20 active education and distribution partners, having added 10 new partners across the region in 2019; and have been working closely with the regulators in Sri Lanka and Bangladesh with ongoing discussions with the regulator in India. In 2020, our focus will be to successfully launch the India Motor Insurance qualification; retain the top 10 corporate clients in India by providing proactive services on an ongoing basis; leverage the launch of online examination set up in Sri Lanka; ensure that new universities and schools collaborate with the CII through our education partner; expand the newly allocated region (Central Asia) by raising the CII brand and establishing new contacts there; and ensure the individual member segment continues to function across the Central and South Asia region.”

The Chartered Insurance Institute

Engaged membership

Dubai International Financial Centre

Engaged membership

Dive In Hong Kong China Institute Professional College

China reinsurance conference United Arab Emirates Insurance Authority

Hong Kong University School of Professional and Continuing Education

Future Insurance Leaders

PFS ‘Futureproof’ Conference

Malaysian Insurance Institute

PFS Power Local Live

Myanmar People’s Insurance Company of China

Medgulf Saudi Arabia

The Chartered Insurance Institute

Annual Report 2019

The Chartered Insurance Institute

Building a trusted profession

OUR STRATEGY IN ACTION

Building a trusted profession Insurance is a promise of help when things go wrong. Without trust, this promise is meaningless and insurance markets cannot function. This is the insight that led to the creation of the CII and the instruction in its Royal Charter to ‘secure and justify the confidence of the public’. However, without clear thinking about what trust is and where it comes from, building trust becomes a shot in the dark. This section is an update on: Our progress in better measuring the level of public trust in the profession; and Our leadership in providing the means for the profession to take practical steps towards building public trust through improved access and relevance for all sections of society.

Public trust index In June 2018 we published our first Public Trust Index, which for the first time measured the elements of insurance that are important to consumers and how those related to their value set. This was of critical importance as it gave us a means to benchmark our delivery of the Charter purpose – by better understanding consumers. Through an exhaustive

process of interviews, video diaries and other qualitative techniques, the researchers found that trust in insurance is made up of nine key ideas about ‘what good looks like’ – both in terms of competent service and ethical standards. The research then measured trust in insurance against each of these building blocks of trust, through a survey of 1,000 consumers and 1,000 small businesses. We promised to update the Index every year, to show how trust in insurance was evolving. The 2019 edition of the Trust Index showed that in the motor, travel and home insurance markets, consumers’ experiences of making a claim are significantly more in line with their expectations than they were a year ago. This was true of the speed with which their claim is processed; the amount of respect shown to them by their

The Chartered Insurance Institute

insurer throughout the process; and the amount of control they have over their lives while their claim is being paid. The area which shows the biggest gap between expectations and performance is still the way in which insurers reward customer loyalty. The gap has increased from 7.64 last year, to 9.1 this year. We have increased the granularity of the information available, with firms now able to drill-down into the online results and gain more detailed feedback. Dr Matthew Connell, Director of Policy and Public Affairs for the CII, said, “Last year, we highlighted the impact that renewal pricing was

The key theme of the essay is that to improve public trust, the entire general insurance profession needs a purposeful culture centred around serving the whole customer. This means producing services for individuals and organisations that are relevant to all the risks they face, whether they are insurable or not. The essay sets out the role that key initiatives such as Corporate Chartered status and the CII’s Inclusive Financial Lives pledge can contribute

having on consumer trust. Since then, the insurance sector has implemented the Association of British Insurers/ British Insurance Brokers’ Association Guiding Principles and Action Points for General Insurance Pricing, and there has been an encouraging amount of high-profile marketing activity promising existing customers that they will be treated fairly. “This means that insurers have increased awareness of the issue of rewarding loyalty, but that perceptions around performance have not changed yet. We expect that as the actions taken by insurers to reward existing customers for their loyalty take effect, the rating around this crucial aspect of trust will begin to increase. This experience underlines the fact that once trust falls, it takes a long time to rebuild it.”

to this culture. It also shows how insights from the Public Trust Index can help build a rigorous focus on improving consumer outcomes, that is key to a better culture.

FCA discussion paper – transforming culture in financial services On 5th March 2020, the Financial Conduct Authority (FCA) published its discussion paper, “Transforming Culture in Financial Services: Driving Purposeful Cultures”. It contains a chapter written by Sian Fisher, CEO of the Chartered Insurance Institute, with the support of a working group of individuals from across the profession on the role of purpose and culture in general insurance.

Annual Report 2019

All party parliamentary group - insurance and financial services There are signs that the Public Trust Index has not only proved a useful tool for the profession and the CII to understand trust levels but it has also enabled the CII to place themselves and the needs of the public at the centre of the debate, and to then work collaboratively with other interested parties to improve trust levels. Another good example of this is the fact that, during the year, the CII were asked to take on the secretariat of an all-party parliamentary group on insurance and widen it out to include financial services. There are also a number of other initiatives launched in 2019 where the CII are leading the profession:

Insuring Women’s Futures pledges As one of the outputs from our work on Insuring Women’s Futures, we are encouraging employers in the insurance and personal finance sector to sign up to two pledges - the Financial Flexible Working pledge and the Inclusive Customer pledge - and commit to

Annual Report 2019

The Chartered Insurance Institute

Building a trusted profession

Pension transfer gold standard principles

1 2

Helping clients understand when advice is appropriate.

Ensuring advice given supports the client’s overall wellbeing in the context of their stated objectives.

3 4 5 6 7 8 9

Ensuring client understanding and acceptance of all charges. Ensuring the most appropriate and updated technical skills are applied. Transparent management of conflicts of interest. Helping clients understanding the cost of transferring benefits.

Avoiding unregulated investments and introducers. Transparency in advice processes and outcomes.

Promoting the Consumer Guide to the Pension Transfer Gold Standard.

Our priorities in 2020

showing leadership in support of financial resilience. Although a number of the examples focus on women, these pledges are easily applicable to other societal groups such as the elderly. To date, 20 major insurers and financial services companies have signed up to the pledges. These support the new Chartered ethos, launched following consultation last year, where not only should firms and the CII work to nurture knowledge but also to improve client centricity and thereby serve society.

defined benefit pension transfer advice, based around a set of principles. Firms can adopt and promote this standard and principles, so consumers can better understand and find good advice, and be confident they are dealing with a firm that is going beyond minimum requirements when giving financial advice. Any financial advice firm can adopt the Gold Standard, regardless of which accredited body they are a member of.

Charity partners Good practice guides As part of our commitment to improving public trust, we are publishing a rolling programme of good practice guides around content relevant to our members, with recommendations of how to operate appropriately and examples of activity that have worked for other members. The content is driven by the Society boards and we often work with a subject matter specialist in a particular field to pull the guide together.

Pension Transfer Gold Standard The Gold Standard is a voluntary code of good practice for safeguarded and

In addition, we have partnered with Scope – the disability equality charity – to develop guidance on reporting and developing a diverse, inclusive working environment for people with disabilities; continued our work with Mind by launching a guide for the insurance profession on managing mental health in the workplace; and maintained our support for various pro-bono initiatives such as My Personal Finance Skills, which delivers financial education workshops to schools and colleges across the UK through a network of Education Champions and aims to be the largest programme of its type in the UK.

To improve public trust the entire general insurance profession needs a purposeful culture centred around serving the whole customer

The Chartered Insurance Institute

Annual Report 2019

Our priorities in 2020 We have four major priorities in 2020:

Personal lines knowledge range

In March 2020, the CII launched the Personal Lines Knowledge Range – a suite of learning and development assets and tools built specifically for those in the consumer retail market. Built around the core product sets of motor, home, travel and pet insurance, this new learning encompasses not only the technical aspects of cover, but also ethical content relevant to all staff, such as inclusive approaches to customer outcomes and dealing with vulnerable customers. The suite comprises conventional qualification units at Award and Certificate level, complemented by free and open online course content in order to be as accessible as possible in this market. It is intended to help firms provide a holistic service to customers and to respond to increased regulatory demand for evidence of organisational purpose and investing in a positive culture.

New Chartered title

In March 2020, we launched a new Chartered title for managing general agents (MGAs), with the support of the Managing General Agents’ Association (MGAA). The Chartered Insurance Underwriting Agent title was launched as part of the CII’s Royal Charter purpose to secure and justify the confidence of the public in the insurance profession. The new title gives MGAs a professional pathway to Chartered status. Chartered status is a public commitment to standards of professionalism and an ethical approach.

Annual Report 2019

The CII launched the new title in recognition of managing general agents’ growing market presence, and to ensure that Chartered status remains a relevant and accessible aspiration for all within the profession. According to the MGAA, this sector has more than 300 firms employing approximately 5,000 people and currently underwrites more than 10% of the UK’s £47 billion general insurance premiums. To hold the new Chartered title individuals must hold the Advanced Diploma in Insurance, be a member of the Chartered Insurance Institute and have at least five years’ sector experience.

New E-commerce platform

In the first quarter of 2020, we are giving greater capability to the customer, simplifying the way we present our products and services to them and thereby improving the overall buying experience. The new platform will be multi-currency with websites offered in different languages where it makes sense to do so, while providing vastly improved levels of flexibility for the customer to make changes to existing bookings as well as an improved member portal (MyCII) and a portal dedicated to insurance and financial planning firms to manage their employees’ learning journey. This represents only the first step in leveraging technology, and especially use of data insight, to support our organisation and the needs of our

customers. Next phases include improving the membership and learning experiences with more functionality and flexibility.

Board changes

At our AGM in June 2019, we gained member agreement to change our bye-laws to bring our governance into line with modern thinking and best practice. These changes were subsequently approved by the Privy Council. The constitution of the CII’s Board, our governing body, has changed with the appointment of our first independent Chair in July 2020, Dr Helen Phillips. The role of Engagement Board Member has also been created to ensure that the voice of our members is considered during Board discussions and decision-making. The Chairs of the Board’s four Committees are now also full Board members.

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Our Societies

Our Societies Acquiring skills and knowledge does not stop with exams, and in a rapidly changing business environment, Societies allow members to keep their continuing professional development up to date on a sectoral level. Personal Finance Society It is 15 years since the launch of the Personal Finance Society (PFS). Since its establishment, through the merger of the Society of Financial Advisers and the Life Insurance Association, the PFS

Finance Society, Brian Steeples of Turris in Glasgow, said: “The whole sector should be proud of just how far it has come in such a short space of time. Qualification levels is a stark indicator of how financial advice has

has evolved into the sector’s leading professional body with a membership of around 40,000 at the end of 2019. This growth rate in membership is extraordinary, with numbers having almost doubled since launch. In 2019, the PFS offered a comprehensive continuing professional development programme with full-day events delivered every month in 27 locations across the UK plus webinars and good practice guides. This has resulted in improved qualification levels in the profession with 53% of the membership qualified to level 4 diploma today, compared to only 18% at a similar level in 2005. In the last decade, the PFS has also increased its engagement and influence with government, regulators and consumer groups. Recent initiatives include the creation of The Pension Advice Taskforce resulting in the creation of Pension Transfer Gold Standard. Inaugural President of the Personal

moved from an industry into a more trusted profession.” Keith Richards, CEO of the Personal Finance Society, said: “Financial advice is now recognised as an essential public service by government and regulators. “We are expanding our pro-bono programmes and increasing the reach of our My Personal Finance Skills programme in schools nationwide as a way of both educating students about personal finance, but also showcasing the rewarding careers available in the sector. “It is encouraging for the future of our profession that we are beginning to attract new generations of advice professionals with a clear benchmark and role within a Chartered profession. “In the next 15 years I am certain that we will see further growth in the numbers of advisers and, together with innovative Fintech solutions, will finally start to address the advice gap.”

Qualification levels is a stark indicator of how financial advice has moved from an industry into a more trusted profession 22

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During 2019, we launched the Society of Claims Professionals and Society of Underwriting Professionals, as well as relaunched the Society of Mortgage Professionals. This takes the number of our Societies to five with the already firmly-established Personal Finance Society, which grew to around 40,000 members in the period, and the Society of Insurance Broking.

Creating communities The Societies are already creating communities by attracting both members and those from outside the immediate world of insurance, for example, those at law firms and assessors who work closely with our profession. We are achieving this by providing tailored solutions based around areas that they are interested in and, most importantly, help them do their jobs better to the benefit of the public. There are, for example, more than 20,000 people who work in claims handling in the UK alone, but there is currently limited professional dialogue between these individuals. The Societies will consequently work to encourage a diverse and inclusive membership with everyone eligible to join irrespective of whether they hold an existing qualification from the CII or elsewhere.

Building the foundations During 2019, our focus has been on setting firm foundations for the Societies, by ensuring that our operational delivery systems were working flawlessly. This has entailed making sure that we are issuing new pieces of online content each month; we are communicating with our

Annual Report 2019

members in a timely, effective and regular manner; we are talking about issues affecting our members; we are representing the interests of our members in the press; and we are active and advocating on behalf of the sector. We have in effect been building a springboard for future success.

Owning sector issues Now the launches are complete and robust internal processes are in place, it is time for the Societies to start taking ownership of key issues in insurance, working within the CII’s wider strategic objectives of raising professional standards, encouraging public trust, and creating better outcomes for customers and clients. One of the biggest factors influencing public trust is how we treat vulnerable customers. Each Society, driven by the individual nature of their sector, must decide how it can start to take ownership of that as an issue and make effective positive change through its members. As a professional body we achieve that by improving the skills and knowledge of our members, so this is now about identifying those key issues and responding to them in an effective manner that provides the insight and guidance our members need.

Broking In the broking sector, we will be focusing heavily on the value of professional advice. Insurance is a profession where consumers can access products and services directly more easily than ever before. In light of that, the role of the broker will evolve. We will talk about how brokers are part of a broader risk management spectrum, and how being correctly advised on products and services will make sure that customers have the right

Annual Report 2019

protection in place, so if things do go wrong, you will have a qualified professional in your corner. Much like a lawyer or accountant, a broker can provide invaluable business support and guidance. In a sector that is all too often driven by cost, we will demonstrate the value of using a skilled and knowledgeable professional.

Claims In claims, we are focused on changing the perception of the sector. One of the CII’s Public Trust Index findings is that amongst those members of the public who have been through the claims process there is generally a good perception of the sector. The lack of trust in claims tends to come from people that have never made a claim. Therefore, there seems to be a disconnect between perception and reality, so we need to look at how we improve public perceptions of the claims process. We will be championing good examples and talking about how the claims process has become more holistic. It is not just about writing a cheque anymore; this is about supporting individuals and families through traumatic or difficult events and achieving the best outcomes for our customers.

Underwriting In underwriting, our work will focus around the role of technology, automation and digitalisation. The underwriting sector is facing some of the biggest risk from automation, with computers capable of making far more accurate risks decisions than a human in a split second. This is having a massive effect on the future role of individuals working in underwriting,

which we believe will increasingly become about effectively guiding and helping our members through a time of change. Our research indicates that members of the public are happy to see large areas of insurance automated, but still want to retain the ability to speak to a human if things go wrong. We believe the underwriter of the future will become more of an overseer, focused on managing and improving systems and processes, and making sure that the right decision has been reached. So, the skills and knowledge requirements of an underwriter are going to change significantly, and we need to ensure that we can support our members through that shift.

Mortgages In the mortgage sector, we have identified three key catalysts for change: increased competition in the market; the changing nature of products and services; and the drive towards professionalism. In recent years, more than ever, there has been a growing expectation amongst the public that mortgage advisers should be well-qualified professionals, and there is an increasing expectation within the sector that team members are qualified to a high level.

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Our people

We have made some notable progress against these themes since the last annual report:

Our people Our people strategy is focused on enabling the delivery of our business model while building public trust and positioning the CII as an employer of choice.

Our people strategy has five related strands:

We have further refined our performance management and our reward and recognition processes to better align colleague benefits with their peers externally; We have launched a new HR system called Cascade, which will become the go-to place for colleagues, including updating personal details and booking leave, but also as a performance management tool; We have various employee support and engagement groups such as Mental Wellbeing, LBGT+, People Inclusion Group as well as active social and charity groups; We have maintained our focus on embedding agile working into our teams through investment and effective management; We signed up to the Insuring Womenâ&#x20AC;&#x2122;s Futures pledge on Financially Inclusive Flexible working; We improved the gender pay gap across the organisation with a 1.9 percentage point reduction in the mean pay gap in the year, and an over 13 percentage point reduction in the last two years; We have continued to improve our gender representation at the Executive level; We are in the process of reviewing the ethnic and international diversity on the Board and Committees; and We hosted four Dive-in events at our International offices. Our strategy will not change in 2020, as we are convinced that our effectiveness in leading the profession is dependent on our ability to build a relevant, modern and diverse team.

Improving customer focus, through measuring experience, not just volumes;

2 3

Improving our productivity, both efficiency and effectiveness; Improving our capability

through the provision of learning and development, and professional qualifications;

Improving our peopleâ&#x20AC;&#x2122;s drive and agility through our policies, processes and engagement; and

Improving our reward and recognition of excellent performance through how we behave, informed by our guiding principles.

Our effectiveness in leading the profession is dependent on our ability to build a relevant, modern and diverse team 24

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Annual Report 2019

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Our executive team

Our executive team Brief biographies and roles of our executive team members are shown here, with details of our broader senior management team available on our website

John Bissell Chief operating officer John has 30 years’ experience in the insurance profession including strategy, underwriting, marketing, development and operations leadership, often with an international component. During his career he has worked at a senior level at an insurer, intermediary, service provider and standards body. He joined the CII in January 2017. He is responsible for the day-to-day operation of the organisation; the creation and delivery of the operations strategy and policies; aligning workforce capabilities with the operating model; and ensuring effective financial management, budgeting and planning processes.

Sian Fisher Chief executive officer

Gill White David Thompson International director

Learning and assessment director

David was appointed the international director of the Chartered Insurance Institute (CII) in October 2018. He is based in Dubai UAE and is responsible

Gill joined in January 2020. Her remit is to take the learning content forwards so it is future fit to meet the profession’s needs in an ever-changing world of work.

for the development of the organisation outside of the UK. David has more than 34 years’ experience within the insurance industry, he is fully equipped with commercial awareness and product knowledge, strong leadership and people skills combined with the ability to work collaboratively and effectively across a wide range of client and stakeholder arenas. He has managed sales teams globally to meet business objectives through large corporates with large customer bases. During his long career he has been a constant advocate for qualifications, has a passion to build public trust in insurance and has been a massive supporter of the CII since taking his first insurance qualification in 1990.

Previously Gill was Business and Markets Development Director for the Chartered Institute of Personnel and Development (CIPD), where her role covered all commercial enterprises, business development, learning content and international areas. Prior to working for the CIPD, Gill held a variety of Head of Learning & Development roles at Vodafone, Xchanging and SSP. Gill holds the prestigious Chartered Director status, one of only 1,000 in the UK; a Master’s programme delivered and awarded by the Institute of Directors. She is also a Fellow of both the Institute of Directors and CIPD.

Sian has held senior roles at a Lloyd’s Syndicate, a UK and European insurance company, a startup intermediary, a market-leading MGA, a major international broker and a US corporate. She was a founder and original board director of the Managing General Agents’ Association and has held senior positions with both the CII and the Insurance Institute of London. She is a graduate of Oxford University, has her ACII, and an executive MBA from Harvard. In February 2016, she joined the CII as chief executive officer, responsible for the implementation of its strategy.

Steve Jenkins Development director Steve has more than 35 years’ experience in financial services and is a Chartered Insurance Practitioner. Much of his early career was spent working in various roles in the AXA Group, latterly as head of bancassurance. Steve joined the CII in 2006 with a brief to lead its corporate and market relationships. He was instrumental in building the CII’s international presence working with employers, local regulators and training providers, and more recently, played a key role in the review of Corporate Chartered status. Steve now has responsibility for the CII’s UK commercial activity and sits on the Confederation of British Industry’s London Regional Council.

Keith Richards Professional standards director Melissa has more than 20 years’ experience in consumer insurance and legal issues. She spent more than a decade at the Financial Ombudsman Service, was a director at Fairer Finance and sits as a Tribunal Judge. She is also a qualified solicitor and specialised in insurance law at Hogan Lovells. Melissa joined the CII in September 2017 to lead our professional standards, ethics and conduct activity. She is also responsible for risk management, disciplinary matters, governance, and Chartered standards.

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Ian Simons

Managing director of engagement and CEO of the Personal Finance Society

Marketing director Ian is responsible for marketing and proposition for the CII group. Ian originally qualified as an underwriter with RSA, before moving to Zurich and requalifying in marketing. After a short period in investment banking, Ian came back to the insurance profession, heading up market development at QBE before returning to RSA to head up UK commercial marketing and finally as group head of social media.

Keith has more than 30 years’ experience operating at executive level across both manufacturing and distribution. He was appointed chief executive of the PFS in May 2013 and additionally appointed managing director of engagement for the CII on 1 August 2016. His role is to improve engagement with members, government, regulators and consumer groups.

Annual Report 2019

IMAGES: TOM CAMPBELL

Melissa Collett

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International matters

The key to unlocking our international potential is our relationship with our 37 affiliated institutes Additionally, there are important, fast-emerging opportunities outside the Commonwealth. We are now very well established in Hong Kong and this is being used as a base to reach out into mainland China and other tiger economies in the region. Probably the biggest opportunity of all lies in the

David Thompson was appointed International Director in October 2018 and is responsible for the development of the CII outside the UK. He has more than 34 years’ experience in the insurance profession managing international sales teams. What is your current plan for delivering quality learning, qualifications and good practice internationally? Before we do anything else, we need to really understand the effect that the coronavirus outbreak will have on our members and staff abroad. It is the most significant international event in my time in the profession and will have a seismic effect on every part of society for many years to come. In our role as one of the most respected professional bodies, we will be expected to provide leadership. Beyond this significant focus, our next role will be to work very closely with the regulators. We have a very good relationship with the local regulator in the United Arab Emirates (UAE) and we are building outwards from there. We also have good relationships with the regulators in Hong Kong and Saudi Arabia and there are many, other regulators that we would like to collaborate with for the benefit of Insurance and Personal Finance consumers around the world. We also need to improve our member engagement. We will be putting greater effort and time into engaging and building a relationship with our members on the international stage. We do a very good job in the UK and I think the improvements to our technology platform will help greatly to do the

same internationally the next few years. In doing this, we must be mindful of tailoring our offer to different regions and, if possible, countries, using local currency and languages as appropriate. We are also developing a structured approach, working with members and partners, to continuing professional development (CPD) and events, enabling us to hold worthwhile valueadding events around the key regions. The key to unlocking our international potential is our relationship with our 38 affiliated institutes. We are in ongoing dialogue with them to understand how we can work closer together and feedback suggests that we have some very good relationships with many of them. The good news, I think, is that the affiliated institutes tend to be in places where we are pretty well-known on the ground. Delivery partners is another route for growing our business to provide our face-to-face training to individuals, and we are currently very focused on growing the number of accredited trainers and being more joined up in our approach. This is something I will be working on with Gill White, our new Director of Learning and Development. We also aim to work more closely with education organisations, such as universities and higher education to, where possible, grant joint qualifications.

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How do the relationships work with the affiliated institutes? The key principle is partnership. Whilst they come in different shapes and sizes, each of the 37 affiliated institutes in our international network have relationships in their communities and provide a range of locally-administered services which have a profound impact on public trust. With our internationally recognised qualification framework, there’s an opportunity for us to amplify one another’s strengths – not just to the benefit of each other, but also to the benefit of regulators, employers and members.

Where has the CII got the most established relationships and where have you focused on establishing relationships? For historic reasons, there was a substantial overlap between the Commonwealth countries and our international activities – which is why we have amazing long-term relationships in countries as diverse as Canada, Ghana, Nigeria, India, Pakistan, Sri Lanka, Singapore, Malaysia and Australia. The Commonwealth principles of prosperity, democracy and peace resonate strongly in each of these markets, and there is huge respect for our Royal Patron Her Majesty the Queen.

Annual Report 2019

Middle East, because we have had a relationship with the local UAE regulator, which is now developing even further, and it is creating a proposition and blueprint that we can go to other regulators with and talk about, be they in Saudi Arabia, Bahrain, Kuwait, Oman or Qatar, where all the regulators are really keen to talk to us.

What are your priorities in the year ahead? The key theme will be to build a united profession that encompasses both insurance and personal finance, and in all our engagement activity we will emphasise the benefits of bringing these disciplines closer together. At a more detailed level, we will be building on the great relationships we have with regulators in the Middle East, especially in Saudi Arabia and this will involve establishing a new office in Dubai; positioning the CII as a valued partner for the many organisations in Asia Pacific that are focusing on the issue of standards; building a plan for action with our affiliated institutes that leverages insights from our recent survey activity; and lastly gaining agreement for the international strategy going forward with the Board in October. The potential for our international business is huge, we just need to be careful to build an infrastructure that can cope well with the opportunities that present themselves as there is no point over-promising and under-delivering.

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President’s statement

President’s statement I am not typical, however, of previous Presidents, as my early career, from 1985 to 2009, was in financial services and only since then have I worked in general insurance, initially with AXA, and latterly, with NFU Mutual, at a composite insurer across financial services and general insurance. This background, I believe, gives me a unique perspective on the needs and aspirations of the whole spectrum of members. For my presidential theme I therefore sought to find something that would unite both sections of the membership and it was in the strapline of the CII that I found the answer. It reads to me as an equation “Standards + Professionalism = Trust” and is a reminder that it is not just the actions of insurance and personal finance companies that influence consumer trust, but also those of individuals. Since the 2008 financial crisis, we have seen a number of moves by the regulator to build consumer trust in the financial services profession. The Financial Conduct Authority’s business plan includes some excellent examples of how focus has been applied to building consumer trust, whether that is the Insurance Distribution Directive, fair treatment of customers or the review of fair general insurance pricing. While the regulator will continue to progress its business plan, my view and my focus for the year has been on what we can do on an individual level.

If you go back to founding times in Lloyd’s Coffee House and the way insurance paid out, it only worked because people honoured their commitments in a way that people who paid the premiums understood and expected. I believe that there are four constituent parts to trust: benevolence, competence, integrity and predictability, and if all those four elements are present then consumers can trust. How often do we challenge ourselves after an interaction with a customer on whether we met the pillars of trust test? Many in our profession fully recognise that our key ‘product’ is often not a tangible item, it is a promise we make. Therefore, the importance of being trusted and trustworthy plays a huge part in whether consumers engage in products and services in the right way and to their maximum advantage. Many of the consumer challenges we face, where we as a profession have tripped up, are

usually down to a breach of one or more of the four pillars of trust. There is so much we do brilliantly across our profession and I am immensely proud of the positive difference we make to people’s lives and businesses, however, there is still work to be done. During my presidential year, I have sought to increase understanding and awareness of how individual actions build or destroy trust and impact the perception consumers have of insurance. If everyone, every day, consciously prioritised building trust in every interaction with consumers then just imagine the difference we could make. I have enjoyed learning from our members and working with CEO, Sian Fisher and the team. We are making real progress in developing the CII and leading the profession into the future.

Nick Turner President

IMAGE: RICHARD GLEED

I was hugely honoured to be elected as the 109th president of the CII in June 2019, after having also served as Personal Finance Society (PFS) president between 2016 and 2017. The list of CII past presidents is long and distinguished and, as I received the President’s Jewel during the ceremonial transfer of office, it was a chance to reflect on the accomplishments of the Institute.

Insurance only worked because people honoured their commitments in a way that people who paid the premiums understood and expected

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Annual Report 2019

The Chartered Insurance Institute

Summary of financial accounts

CII investment portfolio (as at end of 2019)

Total

£5.1m (2018: £3.0m)

Trevor Edwards, Finance Director, gives a summary of the financials during the last year.

Capitalised

Cash and cash products (2%) Fixed interest (15%)

The CII delivered robust financial results in 2019. Revenue was £45.2m compared to £43.2m earned in 2018. This represents an increase in 2019 of £2m or 5%. We continue to focus our efforts on delivering valued services for our members, and relevant learning to benefit the professional development of insurance and financial planning professionals. Our total operating expenditure in 2019 was £42.9m (2018: £43.4m) which includes £0.9m (2018: £2.4m) of transformation expenditure. In 2018, operating expenditure also included £0.6m of mainly one-off building move costs. In addition, a further £4.2m (2018: £0.6m) of transformation cost was capitalised and added to our balance sheet. Transformation activity in 2019 predominantly comprised enhancement of our information technology (IT) infrastructure, to deliver an improved customer experience. Given the nature of the transformation expenditure in 2019, being predominantly related to IT, we have added much of this expenditure to our balance sheet (capitalised expenditure), which reflects the benefits expected in future by the CII. Our new IT will be made available to customers during 2020. When this occurs, the ‘capitalised expenditure’ will then be included in operating expenditure, spread over several years beginning in 2020. Surplus before tax was £2.8m (2018: £1.1m) which includes £0.5m (2018: £0.2m) of treasury gains but excludes contributions made to the CII pension scheme 1993 in both years. In the last quarter of 2019, we paid £1.0m to the pension scheme from an escrow account of deposited funds, in line with the agreed deficit recovery plan. 2018 surplus before tax also included a £1.1m gain on the sale of the Aldermanbury building.

Financial stability An indicator of our financial stability is the level of our Group funds. The CII’s policy is to maintain sufficient total funds which ensures that the CII

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Transformation costs

Expense

6,000,000

UK equities (31%)

Financial results

Europe equities, excl. UK (20%)

(as at end of 2019)

4,500,000

North America equities (5%) Other global equities (12%)

2018

2019

£43.2m

£45.2m

Income

Property funds (15%)

3,000,000

1,500,000

0 2018

£40.4m

£42.0m

BAU expenditure

2019

Total group funds (in £000s) Investments

Cash at bank and short term deposits

Total group funds

50,000

£2.8m

£3.2m

Surplus before tax exc. trans.

37,500

25,000

12,500

£1.7m

£0.4m

Net transformation

£1.1m

£2.8m

Surplus before tax

0 2010

2011

Annual Report 2019

2013

2014

2015

2016

2017

2018

2019

Group operating income and expenses (in £000s) Expenditure excl. transformation

can continue to operate for the foreseeable future, with a minimum level of six months of operating expenditure. At 31 December 2019, the CII’s total accumulated funds were £39.2m (31 December 2018: £37.6m). As we navigate the ‘unchartered waters’ brought about by the Covid-19 virus, both in the UK and internationally, the CII remains financially well positioned to support our membership and continue the development of our proposition to continue raising standards and professionalism.

2012

Operating income

Total operating expenses

46,000

42,750

39,500

36,250

33,000 2010

Annual Report 2019

2011

2012

2013

2014

2015

2016

2017

2018

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2019

Our membership

Membership by Society (as at end of 2019)

During 2019 we delivered on our commitment to provide members with more relevant and valued content by launching Societies for Claims and Underwriting Professionals. Building on the 2018 launch of the Society of Insurance Broking, we also relaunched the Society of Mortgage Professionals with a new practitioner advisory board. 2020 sees the

Personal Finance Society celebrate its 15th anniversary. Societies offer focused and dedicated professional body’s for communities of like-minded

Membership growth CII Group

professionals with shared interests. Expert practitioner boards help us to tailor topical and business relevant CPD content, thought-leadership, research and good practice guidance.

Growth of Chartered members 2019 = 23,373

Personal Finance Society

140,000

Total CII Group members

129,151 Including: Personal Finance Society (31%) Society of Insurance Broking (11%) Society of Claims Professionals (6.7%) Society of Underwriting Professionals (7.9%) Society of Mortgage Professionals (5.7%) CII members not enrolled in a society (28.2%) CII international members (9.5%)

25,000

120,000

100,000

Society of Insurance Broking

Society of Underwriting Professionals

Society of Claims Professionals

Society of Mortgage Professionals

14,254 10,224 7,332

15,000

80,000

Individuals

39,953

8,663

20,000

60,000

40,000

Insurance membership level (CII)

10,000

5,000 20,000

Personal finance membership level (PFS)

0 2010

‘11

‘12

‘13

‘14

‘15

‘16

Year

‘17

‘18

‘19

2015

‘16

‘17

‘18

‘19

Year

FCII 5,123

FPFS 3,323

ACII 20,927

APFS 4,156

DipCII 7,515

DipPFS 21,125

CertCII 20,444

CertPFS 4,011

Ordinary 74,876

Student (incl. affiliates) 7,338

Senior 266

Personal Finance Society

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Annual Report 2019

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