CII publishes Consumer Duty good practice guide for Insurers

The Consumer Duty began with a campaign by the Financial Services Consumer Panel to create a statutory ‘duty of care’ in January 2017.

Marking a crossroads in the way insurance regulation works in the UK, the Consumer Duty lists four outcomes against which firms should judge their impact on consumers.

They are:

• Price and value
• Consumer understanding
• Products and services – making sure that products are designed properly for their target market
• Consumer support – for example, making sure that customers making a claim don’t face unnecessary barriers

Dr Matthew Connell, director of policy and public affairs at the CII said, "One thing that makes insurers nervous about outcomes-based regulation is the thought that it could be interpreted differently over time. What is normal and acceptable now might look very different in ten or fifteen years’ time: we only have to remember that cars used to be built with no rear seat belts and passengers were allowed to smoke on the Underground to see how much standards can change in the course of a career.

"As a result, a lot of the debate around the Consumer Duty has focussed on who is liable if outcomes are not met.

"As people who understand financial services better than anyone else, we should be aware of situations where people frequently misunderstand products or underestimate risks, and work hard to help them avoid harm, through better communications, better products or more response service. Firms’ senior managers should be curious about the outcomes that consumers are experiencing, and be able to show that they have thought about any problems and are genuinely looking for solutions.

"Our good practice guide outlines the significant practical benefits to be gained by firms who explore their customers’ needs from different perspectives."

Download the guide

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