| Link(s): | Insurance multi-firm review of outcomes monitoring under the Consumer Duty | FCA Consumer Duty – information for firms | FCA |
Context
The FCA has published a webpage relating to their recent review of insurance multi-firms and the outcomes for monitoring under the Consumer Duty. In December 2023, the FCA requested the most recent board and/or committee reporting from twenty larger insurance firms. These included general insurers, life insurers, insurance intermediaries and regulated third-party outsourcers which service insurers. The review was focussed on outcomes monitoring only and did not include any assessment of underlying processes (such as value assessments) or consider whether firms were meeting the other requirements of the Duty.
Key points to note and next actions
The responses by firms, included a number of good and poor practices. Some showed good progress in developing a clear and comprehensive firm-wide approach to monitoring customer outcomes. Here is an example of a clear demonstration;
- Clearly defined customer outcomes
- A suite of metrics chosen to monitor those outcomes
- Identification of poor or potentially poor outcomes
- Investigation and, where needed, actions taken
- Evaluation of customer outcomes using targeted metrics
Under the Consumer Duty firms must regularly monitor the outcomes retail customers receive to identify whether they are meeting the Consumer Duty obligations.
Firms must regularly assess, test, understand and evidence the outcomes their customers are receiving. This will enable firms to meet the requirements set out in the Duty. Firms that identify gaps in their compliance with FCA rules should act immediately, putting robust plans in place.
The FCA findings should be used when firms are considering approaches to monitoring outcomes on closed products, as required from 31 July 2024. Firms can also use these findings to support them in the development of their first Consumer Duty annual report, which is also due by 31 July 2024.