Insurers have been urged to improve culture and conduct as the Hayne royal commission continues to expose bad behaviour in the financial services sector.

“The royal commission has dramatically highlighted increased public expectations of the sector… in particular how well it is managing non-financial risks,” PwC says.

“Insurers have a profound impact on society, but they currently have a significant challenge to build engagement with, and trust of, their consumer base.

“It is clear that the role played by risk and compliance professionals in supporting insurance companies to navigate the complex external environment has never been more important.”

PwC’s inaugural Insurance Risk and Compliance Benchmarking Survey shows insurers rely on three main metrics to track conduct: complaints; monitoring and testing sales practices; and breaches and timeliness of resolutions.

But these metrics only provide historical information.

“To be on the front foot, organisations could consider developing insight and analysis about pressures that create behavioural risk that in turn may result in conduct failures,” PwC says.

Actions insurers should consider include creating a chief customer officer role in the executive team. About 35% of survey respondents have one, or a similar position.

“We see such roles increasing, and being further formalised, in the near term,” PwC says.

“We anticipate insurers will draw stronger links between performance, remuneration and risk outcomes, and will adopt a stricter approach to consequence management.”

Executives from 22 general insurers, plus 15 from life and private health, participated in the survey.