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Consumer vulnerability - how well is insurance responding?


Publication date:

13 January 2017

Last updated:

18 September 2019


Policy and Public Affairs

Vulnerable customers require special consideration from the insurance profession.

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 profession.

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 areas.

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 assistance.
  • 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 make changes."

The report was created by the 2015 Underwriting Faculty New Generation Group:

  • Rahul Gumber ACII Chartered Insurer, Aviva
  • Kate Handley ACII Chartered Insurer, Direct Line
  • Victoria Smith DipCII, HSB Engineering Insurance
  • Jenny Wakelin ACII Chartered Insurer, NFU Mutual


This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.