30th June 2023
The introduction of the Consumer Duty by the Financial Conduct Authority (FCA) in July 2023 is one of the greatest regulatory changes the financial services industry will have experienced for years. Part of the requirements that firms need to consider is how to effectively monitor and evidence outcomes, and insurance firms must take proactive steps to ensure that they are meeting the regulatory requirements and providing fair treatment to their customers. This is important not just to ensure that you are adhering to the regulatory requirements, but it can also help towards enhancing your customers’ experience and satisfaction as well as building trust and improving the overall industry reputation.
But what are some of the ways in which firms can actively monitor and evidence customer outcomes?
One of the key areas identified recently by the regulator for improvement was around data. Insurance firms must collect relevant data to assess the outcomes experienced by their customers. This includes gathering data on claims processing, policy pricing, customer complaints, and any other relevant metrics. By analysing this data, firms can identify patters, trends and potential areas for improvement.
Gaining feedback directly from customers can provide valuable insights into their experiences, expectations, and satisfaction levels. Insurance firms can use surveys (including use of survey technology), focus groups, customer interviews etc to gather feedback and identify areas where improvements can be made. This feedback can also be used to evidence the outcomes achieved and demonstrate a commitment to meeting customer expectations.
Conducting regular internal reviews is essential to assess whether the firm’s practices align with the consumer duty requirements. These reviews can involve evaluating customers’ journeys and interactions, claims and complaint handling procedures and compliance with regulatory guidelines.
Effective and efficient complaints handling processes are crucial for monitoring outcomes. Insurance firms should establish a robust system for identifying and resolving customer complaints. Tracking and analysing complaints and root cause analysis data can help identify recurring issues and areas where improvements are needed or where the risk of complaints can be reduced at source.
Your people are at the heart of both compliance and customer service for your business. So, firms need to ensure that their teams have the knowledge and understanding of the consumer duty requirements in relation to their roles and are confident that they are equipped to deliver positive outcomes for customers.
Consumer Duty is an undeniably momentous change for insurance firms and indeed across the financial services industry. At its core, it is seen as a positive and proactive approach to customer care, whereby firms must always act in good faith, avoid causing foreseeable harm, and enable and support retail customers to achieve their financial objectives. And with the right approach, it needn’t be onerous or problematic.
Given the approaching deadline, you’ll likely already have or be thinking about implementing some of these steps, but if you would like to talk it over with one of our experienced subject matter experts here at Davies, then please get in touch with Davies.
Strategic Client Director – Insurance
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