UK Insurers Struggle with Consumer Outcomes One Year After Reform, FCA Finds

A year after introducing tougher protections, Britain's financial watchdog, the Financial Conduct Authority (FCA), reports that some car, home, and other insurers are still failing to deliver good consumer outcomes. The FCA's review highlights poor customer value and potential harm due to inadequate product governance, oversight, and controls.

A year after introducing tougher protections for investors, Britain's financial watchdog, the Financial Conduct Authority (FCA), reports that some insurers are still struggling to guarantee good outcomes for consumers. The FCA's 'thematic review' of the general insurance sector revealed persistent issues affecting customer value and potential harm due to poor product governance, oversight, and controls.

According to the review, many insurers have yet to implement effective frameworks to demonstrate the provision of good value to customers. Furthermore, firms were often found not to be adequately considering the total price paid for policies, including the impact of remuneration on the overall value of their products.

'Progress is being made, but we are still seeing too many examples of insurers and brokers lacking the right information, governance, or oversight to ensure their customers get consistently good outcomes,' stated Matt Brewis, the FCA's director of insurance. In July 2023, the FCA introduced its Consumer Duty, an initiative designed to establish comprehensive consumer protections across the financial sector.

(With inputs from agencies.)