Evidencing Fair Value in general insurance

What is fair value and why should it matter to you?

In the latest policy statement from the FCA detailing the final general insurance pricing practices rules, the term 'fair value' was mentioned 153 times. Fair value is set to be a revolutionary change for general insurance, making it a core focus for the FCA in the coming years. What does it mean, how can you show both insurance product value and insurance regulatory compliance, and how can you make the most of this commercially unique opportunity?

To help you step confidently into the world of fair value, we have launched two new services designed to give you in information you need to evidence your compliance to the FCA, embed fair value throughout your organisational culture, and generate positive business outcomes.

How we can help you with Fair Value

Fair Value Customer Benchmarking

GIPP Performance Tracker

The Fair Value Customer Benchmarking service uses in-depth research to identify key customer outcomes across the end-to-end lifecycle of an insurance customer.

This research determines whether a customer believes that they are receiving fair value from their insurer, and then benchmarks that insurer against each stage of the customer lifecycle to understand why and what you can do to improve.

The GIPP Performance Tracker is a tool to help insurers understand how the insurance market is changing in response to the general insurance pricing practices (GIPP) implementation. It provides you with the ability to track changes across the insurance market and help inform your product proposition and pricing strategy in response to GIPP.

Fair Value Framework

Fair Value Comparison

The Fair Value Framework provides a universal language across the insurance industry of what fair value is, determined by the people that matter most - your customers.

By measuring your performance through the eyes of your customers, you can evidence that you are delivering the fair value experience that you customers want and expect.

The Fair Value Comparison is designed to help insurance brands get ahead of the game by establishing how they compare to their peers and identifying where improvements need to be made ahead of FCA intervention.

How can these services help me?

In combination, these two services provide insurers with greater assurance and evidence that their approach to PS 21/5 is compliant. When the new regulations come into force there will be winners and losers. Having an established feedback loop to understand relative performance will be invaluable, allowing you to make informed decisions on any necessary change.

The Fair Value Framework and Fair Value Comparison will help you understand if your response is commercially proportionate, and whether you are likely to be disadvantaged. These services will also help you understand and therefore embed fair value into your culture and proposition.

Fair value: The danger of marking your own homework

At the end of May, the FCA published its rules resulting from the consultation on general insurance pricing practices. To help you respond to the challenge ahead, our line up of expert panellists unpicked the FCA's freshly published rules and help you establish your first steps regarding implementation.

Our host, Catherine Carey, was joined by guest panellists James Yerkess and Colin Robertson from HAL Consulting - both experts in fair value implementation - and Consumer Intelligence CEO, Ian Hughes to unpick the FCA's freshly published rules and help establish the first steps of fair value implementation.

Fair Value: Navigating the Future with the FCA

Kate Collyer, Chief Economist and Interim Director of Competition at the FCA, joined us to explore the points laid out in the General Insurance Pricing Practices Market Study, and discover what these mean in terms of both expectations, outcomes, next steps and the future of the general insurance industry.

This session covered what is meant by the FCA's general insurance fair value measures, what a firm's role is in relation to fairness, and what fair value looks like in a digital age, touching on key issues such as product governance and reporting requirements.