The Financial Conduct Authority (FCA) has urged insurers to ensure they provide fair value and good customer outcomes, highlighting ongoing concerns in the industry.
While there has been progress in the governance and oversight of product design, management, review, and distribution, the FCA noted that many insurers and brokers still struggle to demonstrate that they are delivering fair value to customers.
In a report released today, the FCA outlined issues related to information sharing between insurers and brokers, as well as challenges in identifying target markets.
Matt Brewis (pictured above), director of insurance at the FCA, emphasised the importance of insurers ensuring that customers receive fair value.
He acknowledged the progress being made but pointed out that there are still numerous instances where insurers and brokers lack the necessary information, governance, or oversight to guarantee consistently good outcomes for customers.
Brewis stated that all insurance firms should take note of the FCA’s findings and implement improvements where needed. He also reaffirmed the FCA’s commitment to taking action where poor value is identified, aiming to maintain consumer confidence in insurance products.
Earlier this year, in February, the FCA temporarily halted the sale of guaranteed asset protection (GAP) insurance with several firms due to concerns about the fairness of the value offered by these products.
In May, the FCA allowed some GAP insurers to resume sales after they made changes to their products.
The FCA also published its latest Value Measures Data for the period from January to December 2023. The regulator warned insurers that if they cannot demonstrate compliance with FCA rules and provide fair value, it will take appropriate regulatory action.
Earlier this month, the regulator banned and penalised Perry Prowse (Insurance Consultants) Ltd.’s sole director Martin Sarl for grave misconduct and dishonesty as Sarl reportedly used the money paid by some of his clients for their insurance premiums to pay personal and company debts.
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