CII response to FCA discussion on competition impacts of Big Tech on financial services industry
Publication date:
25 October 2022
Last updated:
18 December 2023
Author(s):
Chartered Insurance Institute
In response to the FCA’s launch of their discussion on the impacts of big tech on financial services, Dr Matthew Connell, director of policy and public affairs at the Chartered Insurance Institute, noted “We know that some Big tech firms might consider themselves to be in a strong position to deliver insurance to consumers and SMEs in a convenient way, as we depend more and more on mobile technology for payments, checking our finances and purchases. We also know from the CII's Trust Index that ‘ease of doing business’ is an important factor for consumers and SMEs when buying insurance.
“However, experience with comparison websites shows that competition can be skewed towards what is easy to comprehend, with quality of advice and cover losing out to price and convenience. This is despite the fact that both consumers and SMEs rate ‘confidence that the insurance will pay out’ as the most important factor, and SMEs rate protection – having cover that closely matches their needs – as the third most important factor.
“We feel that it is important that the FCA uses the introduction of its Consumer Duty to ensure that competition is driven by the factors that consumers and SMEs believe is most important – this is more often about reliability of cover than price.”
Notes to editors
The factors rated by consumers and providers in order of importance, from the CII’s most recent Trust Index (https://www.cii.co.uk/news-insight/media/press-releases/articles/cost-of-living-crisis-changes-consumer-s-claims-expectations/102244 are:
- Confidence that the insurance will pay out
- Speed of paying claims
- Ease of doing business
- Loyalty to existing customers
- Protection – having cover that closely meets their needs
- Being shown respect during the claims process
- Control over how the claim is paid
- Price
- Relationship with the insurer
For SMEs, the factors in order of importance are:
- Confidence that the insurance will pay out
- Ease of doing business
- Protection – having cover that closely matches their needs
- Loyalty to existing customers
- Control over how the claim is paid
- Speed of paying claims
- Being shown respect during the claims process
- Price
- Relationship with the insurer
The survey consists of 1000 consumers and 1000 SMEs conducted in January and September 2022
ENDS
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.