Conduct risk reporting in South African insurance firms

Abstract

Conduct risk offers a lens into the culture of organisations, and conduct failings seem to be widespread across several jurisdictions and cut across financial services organisations. Managing conduct risk within the financial industry is an essential part of rebuilding trust and supporting future sustainable growth. Furthermore, the regulatory focus on conduct risk is expected to persist and firms will continue to face pressure to be alert to poor behaviour as well as to apply best practice standards to conduct risk. The aim of this study was to compare conduct risk reporting of South African insurance firms to the literature on conduct risk. The study found that conduct risk reporting by the insurance firms was adequate and in most instances aligned to what was published in literature. Although conduct risk reporting by insurance firms seemed adequate, conduct risk is a growing concern not only for the financial industry but for non-financial industries as well. Developing the right conduct framework supported by the right regulations and tone at the top within organisations can therefore drive the effectiveness of managing conduct risk across industries.