WHAT’S ON THE RADAR?
The CII takes a look at what’s new on the policy and public affairs front this month
FCA Continues Focus on Dual Pricing
The UK Financial Conduct Authority (FCA) published its business plan in April, repeating its promise to look at “how firms charge for home and motor insurance, to tackle the fact that longstanding customers pay much higher prices than new customers”.
Karina McTeague, director of gernal insurance and conduct specialists at the FCA, emphasised this in her speech to the British Insurance Brokers’ Association conference in May. She said that the issue of duel pricing “is well illustrated through the results of the CII’s Public Trust index, which has highlighted the impact that loyalty pricing is having on public trust in the industry”.
The results of the FCA’s work on general insurance pricing practices will be published this summer.
PARLIAMENTARY DIMENSION ON CONSUMER ACCESS
The FCA business plan highlighted the issue of access to insurance for people with pre-existing medical conditions. The plan stated: “It can be harder for consumers with specific insurance needs to find or get cover, especially when using mass market distribution channels.”
The FCA went on to state that it was “working to ensure consistent signposting for consumers when accessing travel insurance”. It will “require firms to direct consumers to providers that may be more appropriate to deal with the consumer’s condition”, through a signposting service. It will consult on this new requirement in 2019.
Scottish National Party MP, Hannah Bardell, followed this commitment up in May with a question to the Chancellor, asking what steps he was taking “to ensure that insurance companies do not unfairly discriminate against consumers with… historical and… current mental health conditions”.
This parliamentary dimension could open up new avenues of activity over and above the work the FCA is doing, for example by increasing the measures insurance firms have to take under the broad principles of the Equalities Act. This could include more prescriptive guidance around what firms have to do to demonstrate that they are underwriting fairly.
FCA WON’T TOLERATE TOXIC BEHAVIOUR
The FCA has underlined the significance of diversity and inclusion, not only as an important objective in itself but as a marker of a healthy culture within a firm.
Nausicaa Delfas, the FCA’s executive director of international, said: “We look at how a firm’s culture is shaped by drivers such as incentives and remuneration, training, leadership, governance arrangements, purpose, diversity and inclusion.
“A culture that pursues diversity is one… that is openminded and aspiring to improve.”
Ms Delfas also stressed that a firm’s employment practices, while not directly regulated by the FCA, were an issue of importance and concern to the regulator. She said: “An emerging theme in the last year or so has been non-financial misconduct, such as serious personal misbehaviour, bullying, sexual discrimination or sexual misconduct in the workplace.
This type of serious misbehaviour is toxic to a working environment and can lead to bad outcomes for customers, staff, stakeholders and the firm. “In our view, tolerance of this sort of misconduct would be a clear example of a driver of unhealthy culture. This area clearly requires management attention and a broader change in the firm’s mindset.”
The Insurance Institute of Bournemouth has always tried to interact with local educational facilities and as part of this, a number of the council members have recently attended events within local Dorset schools to promote the insurance profession and wider financial services sector.
Allianz’s Excellence in Claims (EiC) programme is celebrating its 10-year anniversary since the initiative was accredited by the Chartered Insurance Institute in 2007.