Vulnerable customers require special consideration from
the insurance profession, according to a new report from
the Chartered Insurance
Institute's Underwriting Faculty New Generation
Group. The report, Customer Vulnerability - How
well is insurance responding? is the culmination of 18 months
of research by a group of five rising stars from across the
While the group found several examples of good practice
within their own companies and the wider industry and felt that
there had been improvements in this space, the report highlights
that there are still areas that need to be worked on. To address
these, the group outline seven key recommendations for insurers and
brokers encompassing the whole customer journey from point of sale
to claims handling and complaints.
The Financial Conduct Authority (FCA) defines a vulnerable
customer as someone who, due to their personal circumstances, is
especially susceptible to detriment, particularly when a firm is
not acting with appropriate levels of care. The New Generation
group carried out research with insurers, brokers, charities and
NGO's to look at how these customers were being treated.
The research reveals that over half (52%) of charities feel the
people they represent are inherently vulnerable to unfair treatment
from general insurers. Generally, charities think insurers do not
always consider the needs of the people they represent. The FCA
states that, while there is no intention to disadvantage vulnerable
customers, what is often offered for the typical customer is not
always appropriate for vulnerable customers.
The New Generation Group examined five key areas where customers
interact with insurers throughout the product lifecycle:
Suitability of Products, Pricing, Purchasing Journey, Policy
Information and Making a Claim. In each area, it found examples of
good practice and areas where more needs to be done. When it
surveyed charities and groups that work with vulnerable customers,
the vast majority (80%) said that general insurers need to improve
their interactions with vulnerable people across each of these
The Group identified best practice strategies that catered for
vulnerable customers and could be practically implemented within
insurance. The report outlines seven key recommendations for
insurers to implement.
The key guidelines are:
• Vulnerability should be sensitively recorded on a customer's
profile if flagged by any of the customer's interactions with the
insurer, and be regularly reviewed for relevance.
• Charities should be consulted and in some cases partnered with
in all aspects from product development and underwriting, to claims
handling and training.
• Customers should be signposted to more suitable insurance
services if an insurer believes they cannot provide adequate
• Insurance companies should ensure support is offered to a
vulnerable customer so they can effectively interact and insurers
deliver on their promised service.
• Specific training should be mandatory - there are currently many
available learning modules and programmes that have been developed
by charities and organisation that can be used.
• Insurance companies should mimic successful initiatives
developed outside of the profession - in particular energy firms,
which have gone a long way to formalising their approach.
• Existing guidelines have been developed by companies and
industry bodies - insurers should read, use and adopt them.
Ant Gould, Director of Faculties at the CII, said; "The report
should be viewed as a working document that all insurers and
brokers can use as a check list to review their own approaches or
as a discussion document to reflect on where they can and should
The report was created by the 2015 Underwriting Faculty New
• Rahul Gumber ACII Chartered Insurer, Aviva
• Kate Handley ACII Chartered Insurer, Direct Line
• Chris Smart DipCII, Ageas
• Victoria Smith DipCII, HSB Engineering Insurance
• Jenny Wakelin ACII Chartered Insurer, NFU Mutual
The report can be downloaded via the link to the top right of
The CII's New Generation Programme brings together future
leaders in claims, underwriting, broking and the London Market to
explore market issues and develop cross-sector initiatives that
bring real benefits to the profession. For more information see www.cii.co.uk/events/new-generation-programme