The Financial Conduct Authority (FCA) has published July-December 2021 value measures data for general insurance products, in what a commenter considers a peek into the regulator’s data-led future.
Below are the numbers per product, with information on specific firms also available on the FCA website.
|
Product category |
Claims frequency |
Claims acceptance rate |
Average claims payout |
Claim complaints as a % of claims |
Sum of average number of policies in force |
Total retail premiums (written) |
% of premiums paid out in claims |
|---|---|---|---|---|---|---|---|
|
GAP insurance (Add-on) |
0.15% |
96.86% |
£2,452.03 |
3.28% |
492,705 |
£28.63 million |
5.21% |
|
GAP insurance (Stand-alone) |
0.90% |
96.51% |
£635.45 |
1.42% |
1,663,794 |
£108.13 million |
7.81% |
|
Travel - annual European (All) |
2.50% |
85.95% |
£925.51 |
3.85% |
848,696 |
£105.61 million |
9.26% |
|
Excess protection (for motor insurance) (Add-on) |
0.66% |
99.06% |
£385.30 |
0.34% |
400,651 |
£7.43 million |
9.76% |
|
Travel - annual worldwide (All) |
1.73% |
83.37% |
£1,142.09 |
3.90% |
1,419,588 |
£122.85 million |
10.60% |
|
Personal accident (Add-on) |
0.08% |
96.57% |
£1,982.45 |
0.50% |
3,482,930 |
£30.83 million |
17.48% |
|
Travel - single trip (Stand-alone) |
3.66% |
74.71% |
£976.24 |
2.23% |
2,425,261 |
£172.37 million |
18.02% |
|
Healthcare cash plan (All) |
116.52% |
94.10% |
£61.20 |
0.09% |
2,357,622 |
£596.96 million |
26.37% |
|
Home emergency (Add-on) |
2.36% |
86.89% |
£187.62 |
4.00% |
4,812,249 |
£57.34 million |
27.51% |
|
Home - contents only (All) |
1.78% |
78.62% |
£1,394.77 |
5.81% |
4,281,117 |
£283.96 million |
27.58% |
|
Excess protection (for motor insurance) (Stand-alone) |
0.62% |
96.95% |
£396.87 |
0.31% |
1,940,028 |
£11.13 million |
29.68% |
|
Personal accident (Stand-alone) |
0.42% |
80.22% |
£4,802.18 |
3.94% |
886,257 |
£46.82 million |
30.46% |
|
Home emergency (Stand-alone) |
17.13% |
98.19% |
£129.55 |
11.88% |
9,349,769 |
£638.29 million |
31.65% |
|
Home - buildings only (All) |
1.54% |
68.49% |
£4,887.24 |
10.06% |
2,168,261 |
£241.61 million |
36.31% |
|
Dental insurance (All) |
2.95% |
93.59% |
£118.56 |
0.82% |
1,401,116 |
£11.87 million |
38.47% |
|
Extended warranty - electrical goods (Stand-alone) |
6.40% |
99.19% |
£147.70 |
4.81% |
9,180,647 |
£218.67 million |
39.34% |
|
Home - (buildings and contents combined) (All) |
2.63% |
77.36% |
£3,569.86 |
8.02% |
15,100,138 |
£2,339.94 million |
39.90% |
|
Payment protection (credit card, store cards and personal loans) (All) |
0.52% |
84.91% |
£7,039.45 |
5.71% |
399,917 |
£22.54 million |
42.57% |
|
Gadget (including mobile phone) (Add-on) |
8.67% |
98.44% |
£375.16 |
6.35% |
2,601,756 |
£166.32 million |
44.46% |
|
Extended warranty - motor (Stand-alone) |
18.56% |
92.48% |
£701.68 |
1.21% |
353,231 |
£89.37 million |
45.71% |
|
Payment protection (mortgage) (All) |
1.44% |
91.68% |
£3,888.97 |
6.74% |
220,282 |
£29.67 million |
47.61% |
|
Pet - time limited (All) |
16.65% |
86.30% |
£552.80 |
1.65% |
707,178 |
£112.94 million |
50.27% |
|
Pet - maximum benefit (All) |
22.94% |
93.59% |
£520.02 |
1.17% |
469,046 |
£99.55 million |
51.65% |
|
Motor (All) |
5.11% |
99.18% |
£3,320.48 |
4.71% |
33,797,538 |
£8,067.65 million |
56.34% |
|
Pet - covered for life (All) |
30.02% |
92.62% |
£552.11 |
0.74% |
3,146,546 |
£759.69 million |
61.43% |
|
Gadget (including mobile phone) (Stand-alone) |
7.32% |
95.33% |
£304.23 |
6.41% |
4,441,410 |
£124.87 million |
62.72% |
|
Motorcycle (All) |
2.24% |
97.72% |
£6,941.86 |
5.28% |
1,714,488 |
£192.14 million |
65.95% |
|
After the event legal expenses (All) |
1.82% |
93.57% |
|
0.13% |
342,704 |
£51.80 million |
|
|
Before the event legal expenses - home (All) |
0.16% |
56.00% |
|
9.21% |
9,193,481 |
£87.05 million |
|
|
Before the event legal expenses - motor (All) |
0.50% |
95.00% |
|
0.62% |
17,760,905 |
£149.89 million |
|
|
Vehicle breakdown (Add-on) |
6.69% |
93.30% |
|
1.83% |
7,683,817 |
£173.29 million |
|
|
Vehicle breakdown (Stand-alone) |
17.90% |
96.59% |
|
2.07% |
7,343,329 |
£453.90 million |
|
“The data we’ve published… shines a light on the value of a wide range of insurance products and is a crucial step in our efforts to improve competition in the market and values for consumers,” said FCA insurance director Matt Brewis, whose camp aims to create incentives for firms to compete on broader elements of product value than price alone.
“We expect all firms to ensure their products offer fair value to customers and to carry out thorough fair value assessments on their products. We will be engaging with firms to understand the work they are doing to ensure their cover provides fair value.”
For the next release, the regulator will be collecting data in February 2023. The information will span the whole of 2022.
Commenting on the figures, Sicsic Advisory managing partner Michael Sicsic stated: “The FCA has said it is on a journey to become a data-led regulator. The publication of value measures data is a glimpse of what it had in mind.
“The general insurance value measures data is a key component of product value assessment of the FCA’s general pricing practices review. It shows key metrics which brokers and consumers can use to assess the value of a general insurance product by showing claims acceptance rates, complaints rates, average claims payout, and what proportion of premiums are paid out in claims.
Sicsic added: “This reveals very different value profiles between providers and product types, ranging from just 5% of premiums paid out in claims for GAP add-on insurance to 66% in motorcycle insurance. It also shines a light on home insurance, where 77% of buildings & contents claims were accepted, compared with 99% of motor.”
The managing partner also believes the variances, particularly among providers, raise several questions for the market.
He pointed out: “For insurers who will see themselves publicly benchmarked against peers for the first time – are they comfortable that their product provides fair value? For brokers – is the data published by the insurers consistent with the information they received in order to make their own fair value assessments?
“And if they run a panel, is there a material difference between insurers for the same product when it comes to payouts and complaints? All of this can also be viewed with the forthcoming Consumer Duty principle in mind.”
Meanwhile firms are not required to report claims cost information for legal expenses insurance or vehicle breakdown insurance, thus the lack of data for the products in the table above.
