Modern Insurance Magazine Issue 62

EDITORIAL BOARD
Preparing Teams for the
New Consumer Duty
The new Consumer Duty requirements for General
Insurance is a significant shift in regulatory
expectations. It introduces a more outcomes-focused
approach to consumer protection, and sets higher
expectations for the standard of care given to
customers.
The Financial Conduct Authority (FCA) want good outcomes
for customers to be at the heart of firms’ strategies and business
objectives, and leaders have a key role to play here. Firms’ boards and
senior management should embed the interests of customers into
their culture and purpose.
Here at Carpenters Group, our values are fully aligned to delivering
a first-class claims experience. We understand that it is paramount
to our customers and our insurer partners that we deliver when the
customer needs us most – at the point of claim.
Our long-standing relationships are a testament to the quality of our
service. Our focus is always on the customer, ensuring a claims journey
that consistently exceeds expectation.
Carpenters Group have been preparing for the new Consumer Duty
for some time, building on the strong foundation of our customer
focused strategy. This already includes constant training to ensure
that we are treating all customers fairly, along with our more specific
training for vulnerable customers in particular. We have adapted
our training regime to include Consumer Duty specific training to all
colleagues, supporting their understanding of the changes and what
this means to the various teams across the business.
We continue to work collaboratively with our insurer clients to
ensure that we represent their brand in the best possible light, by
communicating with customers in a way that effectively meets the
differing requirements of our insurer clients.
Identifying vulnerability has always been a part of the Carpenters
Group customer journey, and this has not changed. We promote an
agile and adaptive approach, long recognising that ‘one size does not
fit all’.
We are closely linked to our insurers with regards to data and
reporting requirements, and remain happy to discuss the industry’s
wider needs with regards to reporting and agreeing a standard set of
MI, one that all parties involved in the customer journey can subscribe
to.
Paul Challoner,
Commercial Director, Carpenters Group
The New Consumer Duty:
A Change in Distribution
The new Consumer Duty rules will set ‘higher
and clearer standards of consumer protection’
for the insurance industry. While many firms will
already have the new rules enshrined in their
operations, securing consumer protection during
the distribution journey brings its own unique set of
challenges, and should not be neglected.
During B2C digital journeys, customers must fend for themselves
as they navigate the online infrastructure of the business they are
engaging with. Many B2C journeys are optimised around new business
generation, but Consumer Duty requires firms to make a product’s
cancellation process just as simple as the purchase process.
There are several ways that firms can achieve this, one of which is
to offer an end-to-end digital portal that allows clients to log in and
make changes themselves. Some firms will struggle with this from a
technical perspective and a cost perspective, and this solution will
not suit everyone. Quite rightly, many firms will want to speak to the
client before they make changes to their policy, particularly during
the cost-of-living crisis when clients might be tempted towards
underinsurance. To support this, firms need to make their online
environment clear - complete with instructions that detail how clients
can amend or cancel their policies, and with obvious signposting to
guide clients in the right direction.
Brokers and MGAs/insurers may also have to communicate with
clients in new ways. The FCA has identified good practice for MGAs/
insurers, asking them to contact clients directly (even when a
broker controls the relationship) to establish whether the product is
appropriate, particularly when there is a possibility that the client is
vulnerable in some way.
This is challenging for brokers and MGAs/insurers in two ways. Firstly,
the MGA/insurer would not necessarily have contact details for their
clients if the business was brokered, and the infrastructure may not
be in place to allow this to be shared between both parties. Secondly,
the idea of an MGA/insurer contacting a client directly will be
anathema to many brokers, and quite likely prohibited by the existing
agreements in place between them.
However, innovative brokers and MGAs/insurers are likely to be able
to find a strong solution to this challenge. Many may see it as an
opportunity to engage with clients on a joint basis, and in a manner
that not only satisfies the requirements of Consumer Duty, but also
strengthens the operations of their respective brands.
Will Prest,
Product Manager, ParaCode
MODERN INSURANCE | 17