CII survey shows if insurers meet FCA’s requirements
11 April 2022
11 April 2022
Chartered Insurance Institute
The Chartered Insurance Institute’s survey of consumer attitudes to insurance has revealed how the profession is meeting the FCA’s Consumer Duty requirements as well as areas where there is room for improvement.
This year the regulator is introducing a new Consumer Duty across all forms of financial services, including insurance.
For each sector, the FCA will measure results under four headings: fair value, products and services, treatment of customers and confidence.
Since 2018, the CII’s Public Trust Index has been measuring outcomes for general insurance that map across directly to these headings.
The latest Public Trust Index findings, produced by a survey of 1,000 consumers of home, motor and travel insurance between December 2021 and January 2022, delivers a benchmark for where the profession is and what it needs to do to meet the FCA’s Consumer Duty expectations.
The latest Public Trust Index shows consumers want insurers to be like a good butler: quietly getting on with their job when they are not needed, attentive and responsive when they are needed.
Consumers don’t want to have to check up on whether their insurer is acting in their interests or not – they expect a good level of cover at a competitive price, and they want to be rewarded for coming back to the same insurer every year.
But they also want their insurer to be attentive to them when it matters, for example:
- By actively demonstrating that their policy is priced competitively, for example by matching a cheaper quote from a competitor.
- By being clearly informed about what the policy covers and excludes and being able to add and take away elements of cover.
- When they make a claim, being shown compassion and being given effective assistance and advice.
- Having their risks assessed individually and not generically.
The CII’s Public Trust Index reveals for most consumers, quality of service is more important than price.
Consumers consistently state it is less important for them to have the cheapest policy, than it is to have:
- Confidence that the insurer will pay out.
- An easy way to do business.
- Rewards for loyalty.
- An appropriate level of protection offered by a policy.
- Claims that are paid quickly.
- Respect from the insurer when they make a claim.
Matthew Connell, director of policy and public affairs of the Chartered Insurance Institute, said: “For consumers, having confidence that their insurer will be there when they need them is the most important factor in buying insurance, with consumers attaching more importance to the statement ‘I know what the policy covers and excludes’ than any other.
“Between 48 per cent and 53 per cent of consumers said agreed with the statement ‘I know the company pays out quickly and worries about paperwork later’, whereas between 10 per cent and 14 per cent disagreed.
“For the insurance profession is to meet the FCA’s Consumer Duty requirements it will have to demonstrate that it is identifying and acting on areas for improvement, and we recommend insurers look carefully at two areas. First, assuring consumers that their risks are assessed individually rather than being based on generic assumptions, and second, the way the claims process is communicated before consumers purchase a policy.”
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.