Download the AMII Autumn Meeting Wednesday November 11th 2009

Stuart Scullion, Chairman
Association of Medical Insurers and Intermediaries
Increasing transparency and engagement at renewal
in general insurance markets: PS16/21
29th September 2016
“We act to ensure that a firm has its customers at the heart
of how it does business, giving them appropriate products
and services, and putting their protection above profits or
remuneration.
To make sure consumers are protected and treated fairly, we
monitor which firms and individuals are able to enter the
financial markets, making sure that they meet our standards
before we authorise them”.
CP15/41 Proposal Dec 2015
“These proposals address concerns about levels of consumer
engagement and their treatment by firms at renewal, and
the lack of competition that results from this. This can result
in consumers defaulting to renew products that are not good
value or have become unsuitable for their changing needs”.
CP15/41 Proposal Dec 2015
We are proposing:
•Rules that require firms to disclose last year’s premium on renewal notices
•Rules that require additional disclosure when customers have renewed the
same product four times or more
•Guidance on how firms can improve their processes around renewals
•Guidance about records that firms maintain to demonstrate compliance,
including a record of premiums.
We also remind firms of their obligations to treat customers fairly when
developing their overall approach to renewal pricing and in their treatment of
long-standing customers.
Who did FCA consult?
“ In 2014, we launched a large-scale randomised controlled
trial with over 300,000 customers from one home insurance
and two motor insurance providers to assess whether
improved disclosure can help consumers become more
engaged at renewal”.
Who did FCA consult?
109 Firms
No Specialist
Healthcare
Intermediaries
2 Intermediary
Firms with an
interest in
health &
wellbeing
4 Insurers with
an interest in
health &
wellbeing
“Apply liberally to everyone
engaged in the distribution,
sales & administration of
general insurance products”
TAR
Premium comparison
In order to work most effectively, we are proposing to allow
firms to implement a format appropriate to their customer
communications. We set out below one version of how firms
might consider meeting the requirement to disclose last years’
premium:
Your renewal quote for this year is: £200.00
Last year’s premium was: £150.00
This is £50 more than last year.
Remember:
Check your cover
Shop around for the best deal
What do we need to do?
Renewal Years 1-3 suggested prompt:
For example, firms may wish to use the following prompt:
‘Have you checked that your insurance cover still meets your
needs?
Have you considered shopping round to find the best deal for
the cover you want?’
Year 4 mandatory text
We have also altered the prescribed ‘shopping around’
message, which must be provided at the fourth renewal. The
new wording for the disclosure that will apply at the fourth
renewal is:
‘You have been with us for a number of years. You may be able
to get the insurance cover you want at a better price if you
shop around.’
Why does PS16/21 cause us
concern?
• Bundles health & wellbeing together with home & motor
insurance
• Undermines Consumer confidence in the value of the service
being provided by their adviser
• Fails to recognise the complexities of medical underwriting ,
particularly in relation to pre-existing medical conditions
• Encourages “churning”
• Places cost above value
• Potentially leads to higher initial pricing
Who will be most affected?
Insurer
direct sales
forces
Anyone who
operates a solus
arrangement
Winners?
Anyone who really takes
care of their client, offering
genuine independent
advice……………..
Any Questions?