Change comes from within: how to fight corruption in the insurance market?

By Luiz Fernando Palaio

The most important factor in any negotiation is trust, especially in the insurance market. On the one hand, the insured wants to be sure that their risks are covered. On the other hand, the companies operating in the sector (insurers, brokers and reinsurers) value transparency in information.

Even though it is an important pillar for sustaining the relationship between the two parties, it is fragile in some situations. From my experience, I can say that it makes a difference when companies have compliance in their processes, especially in the insurance sector.

In order to understand the actions of these companies and the regulatory bodies, I have compiled the main information on the subject in this article, highlighting the need for us to take the initiative in this matter.

Supervision: Susep’s role in regulating compliance

The Superintendence of Private Insurance (SUSEP) has played a key role in regulating and supervising the insurance market in Brazil, with special focus on combating corruption and ensuring compliance in this area.

Through various circulars, Susep establishes strict guidelines for insurers and insurance brokers, promoting practices aimed at increasing transparency and integrity in the sector. That’s why we have to pay attention to each of them.

Among the regulator’s main initiatives are the implementation of internal control systems, the requirement for periodic audit reports and the promotion of ongoing training on ethics and compliance in companies. But how is this supervision carried out? Let’s understand this better.

Anti-Corruption Law No. 12.846/2013: the responsibilities of the insurance sector

It is worth remembering that the legislation is a milestone in the fight against corruption in Brazil and has brought in a series of important measures to combat illicit activities and practices, particularly in the private sphere.

An interesting fact is that the Anti-Corruption Law turned 10 in July 2023, and a survey carried out by Quaest revealed that 95% of respondents working for the 100 largest Brazilian companies approve the rule. Good news for the sector.

In the insurance market, legislation reinforces the importance of structured and clear compliance policies, requiring insurers, brokers, reinsurers and any intermediary in the process to adopt effective measures to detect and prevent acts of corruption.

This is why it is so necessary to establish a solid code of ethics, carry out regular internal audits and promote ongoing training for all employees, thus guaranteeing compliance with the law and protecting the integrity of the market. After all, real change depends on each of the people involved in the company’s processes.

The insurance market’s role in fighting corruption

In an industry where we deal with sensitive information all the time, it is essential that companies are more careful and transparent about their processes. However, is this perception present everywhere?

It is common for large insurance companies to have well-established integrity programs dedicated to compliance and the fight against corruption. These initiatives include rigorous internal audits, accessible and functioning whistleblowing channels, and clear and defined conduct policies to show transparency and ethics in their operations.

But the market is not just made up of insurers and reinsurers. Equally important, brokers also have a responsibility to show transparency and effectiveness in their compliance structure. This shows the need to reinforce this culture in all areas of the insurance market, adopting similar measures to guarantee the same standards of integrity.

We must look at the insurance sector as a whole, adopting solid integrity programs and ensuring that everyone is committed to ethics and transparency, which are determining factors for those who deal with sensitive data at all times. After all, corruption can be expressed in a variety of ways, such as harassment and very small acts of aggression, or even theft and robbery. The concept is broader and is directly related to the company’s culture and people.

Compliance is not something that can be dealt with in isolation, but a pillar that needs to be part of everyday life, in every area of the business. If you believe in change, it’s essential to start looking inwards, finding the gaps and correcting the company itself before any initiative aimed at the sector.

How does Horiens continue to evolve to fight corruption in the insurance market?

With this mindset, Horiens has an internal area that takes care of all this, starting with our Integrity Committee.

The purpose of this “selection for integrity” is precisely to make decisions when we notice any deviation from our code of conduct. Act quickly and precisely to avoid the repetition of the situation in the future.

We have also structured our own guiding documents, such as our Integrity Policy, Code of Conduct, Integrated Corporate Risk Management Policy and Anti-Money Laundering and Counter-Terrorist Financing Policy, to put the company’s rules and guidelines on paper, integrating them into our culture with a commitment to making our employees aware of them.

In addition to this, we deal with tendering procedures with public bodies, and this concern with transparency and the prevention of money laundering (PLD) is fundamental to strengthening our integrity with customers, partners and all those involved in our field of activity.

Together in the quest for compliance of the insurance market

It’s not just about the right processes, technology or methodology. When we talk about compliance, transparency and integrity, I always emphasize that people must come first.

It is their attitudes that need to be observed and, when necessary, corrected, so that their positioning reinforces good behavior, stipulating ethics, transparency and compliance as part of the company’s culture. In this way, it will be possible to structure an action plan that awakens the feeling of doing the right thing, through a more focused view of whistleblowing, with quick and efficient responses, to mitigate risks in the future.

This way, of course, we will be able to show the market the relevance of all these issues for the company, and also emphasize how important it is for not only the big insurers, but also the brokers and reinsurers to take the lead and even connect to ensure compliance throughout the sector. We can share this responsibility and exchange experiences by creating committees and organizing forums to discuss how to improve our own processes.

This is the basis for a relationship of trust, both inside and outside the company.