2021 Insurance Ethics Survey Results & Conclusions

Thoughtware Article Published: Mar 28, 2022
Charts, people and a laptop

Several months ago, BKD launched an ethics survey to assess how companies encourage ethical conduct and resolve ethical issues and disputes. What follows are the survey results and some conclusions we believe are supported by the survey data.

There were 128 respondents, most of them from the insurance industry (regulated insurers, agencies, brokers, and third-party administrators) or professional services firms (accounting and law firms). Additional folks from other industries participated, and there was a smattering of participants from the regulatory and educational fields. The breakdown is summarized below.

Graph 1

Respondents were asked what type of ethical policy their respective company employed. Choices were:

  • Written policy with regular (perhaps annual) training
  • Written policy with no training
  • Informal policy
  • Reference to the AICPA Code of Conduct (or other professional code of conduct)
  • No policy

More than 80 percent of those polled claimed their employer had a written ethics policy, with three-quarters of those citing a written policy with regular training. Anecdotal evidence indicates that those with no policy are relatively smaller organizations. The following table summarizes the results. 

Graph 2

Survey participants were then asked if their company policies made sense. In other words, given the size of the company and its business objectives, do the stated ethical policies align with employees’ expectations and sensibilities? The answer was overwhelmingly affirmative—the ethical guidelines resonated and there appeared to be no ambiguity.

Graph 3

The BKD survey also asked about the most common means of communicating ethical concerns. It appears most companies prefer communication either directly to internal human resources or indirectly via a hotline. Some of the respondents, perhaps from larger private or public companies, indicated that corporate governance dictated that the audit committee or full board of directors be informed of ethically questionable behavior. 

Graph 5

Next, we asked those surveyed about their ethical guidelines. In other words, where do we look for guidance in the workplace? Is it following ethical standards established by a professional body, like the AICPA? Or is it based on general standards of morality (the Golden Rule) or even more specific standards based on religious beliefs? In fairness, there is significant overlap in these standards, but there also are key differences. Something may be permissible under the AICPA Code of Conduct (do unto others) but not be the type of behavior that one would want reciprocated (please do not do to me). Or there may be a favor you would like to do for a friend with a fledgling business that may seem kind but may be deemed a conflict of interest under the Code. Here are the results of this question, but we will leave it to the reader to draw his or her own conclusions. 

Graph 6

A pair of questions was next posed as to what drives ethical and unethical behavior. With respect to the drivers of ethical conduct, the second most popular response was surprising. Nearly one-quarter of those polled indicated that fear of punishment was the primary driver of compliance with ethical standards. While fear can be a very compelling emotion, it does not imply that improper conduct would follow if the threat of penalties was eliminated. 

Graph 8

The primary driver of unethical conduct is not surprising—good, old-fashioned greed ranked atop the list. What caught our attention was the second most popular answer, which was reputational damage. Some unethical conduct may be motivated by the loss of status. In other words, the desire to cover up a mistake or error to preserve one’s good name may lead to improper action. History tells us that the cover-up is often worse than the error or mistake itself. The results of these two questions are presented below.

Graph 7

Respondents were asked what they believe is the most important characteristic of an ethics policy. The choices presented were:

  • Consistency – Knowing that any violation, regardless of the level of management involved, will be treated in the same fashion
  • Clarity – Having the necessary information to determine if a violation has occurred and how the process for vetting a violation works
  • Transparency – For the parties with knowledge of the events, knowing the facts were uncovered and any action was clearly explained
  • Anonymity – Feeling confident the identity of any party disclosing a potential breach, or anyone accused of a breach, is protected as much as possible

Although all of these characteristics are important aspects of a sound ethical code of conduct, the following illustrates that Consistency and Clarity are considered of greater importance by those surveyed.

Graph 9

Policies are fine and good, but their effectiveness is not put to the test until a violation or potential violation occurs. So, we asked if respondents had witnessed an ethical violation. Nearly one-quarter of the respondents had witnessed an ethical violation. Although the vast majority of those actual or perceived violations were reported, more than 10 percent were not. That is a bit disturbing, as an ethics policy can only function effectively if potential violations are timely reported.

Graph 4

We dug a bit deeper for those who had witnessed a violation. Most fact patterns were dealt with fairly, but there appears to be a reasonable number that were glossed over and, arguably, not subjected to the formalities of the ethics policy. The following summarizes the results for these three questions (note that two respondents who indicated that the violation was not reported also indicated the incident was either glossed over or they were unsure as to its disposition).

Graph 4.2

The final question proved to be quite interesting as participants were asked to indicate their favorite breakfast cereal. The author of the survey let respondents choose one of four cereals listed (Life, Cap’n Crunch, Lucky Charms, or Count Chocula) or indicate “Other” and write in their favorite cereal name.  

Graph 10

Of the listed cereals, Cap’n Crunch prevailed. Who doesn’t like a man in uniform? Lucky Charms came in a close second. Popular write-ins included Honey Nut Cheerios, Honey Bunches of Oats, and Cinnamon Toast Crunch. One vote was prematurely cast for the soon-to-be-released Dunkin’ Donuts cereal. And one person indicated he or she does intermittent fasting and only eats between noon and 8 p.m.


Based on the survey results, the vast majority of companies have a written ethics policy and most provide related training. Respondents indicated that these policies were consistent with their core values.  

Ethical conduct appears to be inspired by faith and motivated by the desire to “do unto others” as required by the Golden Rule. Not surprisingly, the primary drivers of unethical conduct were thought to be greed and the potential loss of professional reputation. Consistency and clarity were considered to be the most important aspects of an ethics policy.  

However, the operational effectiveness of the policies was called into question. Of the nearly one-third of those polled who had witnessed an ethical violation—nearly all of which were reported—one in four incidents were either glossed over or the resolution was not known.  

Thanks to all who participated in the survey. Please look for another ethics survey in the coming months!

If you have any questions or need assistance in the meantime, please contact your advisor or submit the Contact Us form below.

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