Insurers should take heed

Europe

The insurance industry continues to ignore corporate governance requirements despite the emphasis placed on the issue by the regulatory authorities, according to accounting and consultancy firm, Moore Stephens. Moore Stephens partner Simon Gallagher points to the corporate governance guidelines issued by organisations such as the Association of Mutual Insurers, and the International Association of Insurance Supervisors – as well as national regulating bodies such as APRA in Australia. Companies should use these guidelines to develop their very own code. “Companies should be creating principles that fit their own corporate profile and at the same time satisfy the regulators”, Mr Gallagher says. He emphasised the implementation of appropriate internal and external controls such as ensuring that the board is made up of the right people, with the courage and experience to challenge one another and demand accountability at senior management level. External controls include the appointment of appropriately qualified non-executive Directors, who might include senior managers from distinct areas of the business. Mr Gallagher notes that if the issue is not addressed by the industry, “it is the regulators who will be doing the thinking for those who have neglected this important area of their business.”