Modern Insurance Magazine Issue 62

ASSOCIATIONS ASSEMBLE
David Sparkes
Title: Regulation Director
Association: British Insurance Brokers’
Association (BIBA)
Using the Consumer
Duty to Deliver
Good Outcomes
With the Consumer Duty now a key part
of the fabric for all Financial Conduct
Authority (FCA) regulated markets, there
is an expectation that good outcomes will
be the norm for customers as part of the
general service provided - let alone the
claims service.
However, is this truly the case? How many issues will we
see like the one we saw around business interruption
claims, or the accusation that at least one firm was
offering customers less than market value for their cars
in total loss claims?
In reality, there’s an important balance to be made
between customer outcomes and maintaining a
financially stable business. When you set it down in
black and white, it becomes rather obvious that it’s
not possible to sustain ‘competition in the interests
of customers’ (to use the terminology in the relevant
FCA objective) if a firm’s claims payments exceed their
premium income and any reserves.
So, how does a firm strike the right balance?
Communications play a vital role, both in terms of
what teams within firms hear about the service and
outcomes they are employed to deliver, and the
messages that customers hear or read as part of the
arrangement or claims process. The ‘old’ standard of
‘clear, fair, and not misleading’ is now the baseline, not
the expected standard.
A key part of the Consumer Duty requires a guarantee
of customer understanding when it comes to what
they have been told. This needs to be a detailed
conversation, but not a technical one, otherwise
customer understanding will go out of the window.
Customers that understand their claims settlement
and accept this as meeting the expectations of their
insurance cover will result in good outcomes.
Mike Keating
Title: CEO
Association: Managing General Agents’
Association (MGAA)
MGAs: Vital Support
for Brokers
The relationship between brokers and
MGAs has gone from strength to strength
in recent years. Looking at our membership
figures alone, 90% of MGAA members
now distribute products via the broker
community, a figure that continues to grow.
Where MGAs were once seen by the insurance industry
as niche outsiders, they are quickly becoming the go-to
way for brokers to place business on behalf of their
clients. But why is this the case?
Perhaps one of the more obvious reasons is that MGAs
cover risks in niche markets, and many larger insurers
don’t have the resource, appetite or expertise to
compete. But this is just the tip of the iceberg in terms
of the value that MGAs can offer.
Because of the agile nature of MGAs, they’re able to
provide a level of service which larger organisations
would naturally struggle to achieve. From a broker
panel session at our recent annual conference, we know
that an MGA’s tailored, efficient, and personal approach
to customer service is one of the key benefits of their
offering.
We also know that brokers appreciate having greater
access to decision-makers within the businesses they
partner with, which further adds to the overall positive
experience of working with MGAs.
MGAs have been fundamental in helping brokers tackle
the economic headwinds that the industry continues
to battle against. As insurance prices continue to
rise, MGAs have been able to offer tailored solutions
centered around the needs of the broker and their
clients, a proposition which is difficult to find elsewhere.
The fact that relationships
between MGAs and their
broker partners continue to
thrive is a testament to the
value they provide - not only
to brokers themselves, but
to the industry as a whole.
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