You may remember that earlier this year we shared an update on the Which? Super Complaint and the FCA’s response here.  The regulator’s continued focus on delivering good customer outcomes has remained high on the agenda, and its latest activity demonstrates that this isn’t slowing down.

The FCA is now issuing a questionnaire to a number of insurance brokers, with a particular focus on Consumer Understanding. The questionnaire is designed to help the FCA understand how firms ensure that customers genuinely understand the products they are buying, both at the point of sale and throughout the lifetime of their policy.

Whilst this questionnaire has been issued primarily as a result of the Which? Super Complaint, the themes are relevant across all insurance products. It’s therefore a useful exercise for every firm to consider these questions internally, regardless of whether you’ve received the questionnaire directly.

Taking the time to review your current processes can help identify any gaps in your customer journey and demonstrate your ongoing commitment to delivering good customer outcomes.

Pre-Sale / Point of Sale

• How does your firm assess whether customers understand the key features and limitations of the policy they are buying during the sales journey and at the point of sale?
• Do you have supporting evidence to demonstrate this?
• Has your assessment identified any areas in your sales process where customers struggle to understand the product or key policy features?

Ongoing Support and Monitoring of Effectiveness

• How do you continue to support your customers’ understanding of core product concepts, particularly those that may affect claims outcomes or their ability to make a successful claim?
• How do you identify where customers may not fully understand their insurance after purchase and throughout the policy lifecycle, including at renewal?
• What measures do you have in place to monitor whether your communications remain effective over time?

Taking Action

• Where gaps or misunderstandings have been identified, what actions has your firm taken to address them across the relevant stages of the customer journey?
• How do you monitor whether those improvements have had the desired impact?

With the end of July marking the annual deadline for your Consumer Duty Board Report, now is an ideal time to review these areas. Working through these questions can provide valuable evidence of your firm’s ongoing monitoring, governance and commitment to improving customer understanding and delivering good outcomes.

As always, if you have any questions or would like support in reviewing your Consumer Duty arrangements, please get in touch with us.