The Chartered Insurance Institute (CII) is calling on the insurance industry to move beyond a compliance-driven approach and prioritise meaningful support for customers in vulnerable circumstances.
A new report, based on a recent roundtable, suggests insurers need to shift focus from identifying characteristics of vulnerability to embedding support throughout the customer journey.
The roundtable brought together stakeholders from across the sector, including representatives from the Financial Conduct Authority (FCA), the Financial Ombudsman Service (FOS), consumer groups, academics and industry professionals.
According to the report, entitled “Managing Vulnerability in Insurance Roundtable Summary Report,” leadership engagement is critical as it urges boards and senior executives to take direct responsibility for improving outcomes rather than delegating the task to compliance or customer service departments.
One of the key issues identified was the lack of high-quality management information and the difficulty firms face in connection data, actions and outcomes. Many organisations struggle to demonstrate how identifying vulnerability leads to improved customer outcomes, making it harder to measure the effectiveness of current strategies, the report said.
Participants also pointed to the importance of creating an environment where customers feel safe and supported in disclosing personal challenges. This requires a move away from rigid scripting and towards more flexible, empathetic communications.
The report also highlighted that vulnerability training often does not extend beyond frontline staff, leaving key functions such as product design, underwriting and leadership teams without the necessary tools to understand the real-life challenges faced by vulnerable customers. Expanding training across these roles is seen as essential for creating inclusive and accessible services.
A lack of consistent industry standards was also raised as a barrier to progress. While current regulation offers a framework for managing vulnerability, roundtable participants said practical application varies widely. The report proposed the development of sector-wide standards to establish clear expectations for identifying vulnerability, building capability across all roles, integrating vulnerability into product and service design and monitoring customer outcomes.
Matthew Hill (pictured), chief executive of the CII, said that while the sector has made progress in recognising vulnerability, more work is needed to translate principles into practice.
“Managing customer vulnerability within insurance services is still in its infancy,” he said. “The CII Roundtable Summary Report on Managing Vulnerability in Insurance aims to build on these premises, and develop effective processes that may be implemented by firms to deliver tangible improvements for vulnerable customers.”
The CII said it intends to issue practical guidance to help firms implement the report’s findings, aimed at turning regulatory expectations and roundtable insights into actionable steps. It plans to host a follow-up session focusing on data sharing across the insurance distribution chain, a key part of delivering on Consumer Duty requirements.
