As we approach Christmas, the big freeze is nearly with us, not winter but a change freeze that means that many companies will soon be locking down their initial approach to the new General Insurance Pricing Practices rules, ahead of GIPP deadline day on 17 January, just one month away from now.

As we all look towards 2022 and the future of the insurance market with a level of uncertainty, you’ll be ending the year with a plethora of questions on your mind. Have you done enough? What is the rest of the market doing? Who is going to get fined first and how big is the fine going to be? What new products or companies will I need to compete with over the next year?

These are just a few of the questions we are being asked ahead of the change in the market, and they are all fair.

For everyone asking these questions, it is important to understand that GIPP is just the Tsunami caused the movement of a tectonic plate by the regulator. The shift towards Customer Duty announced earlier this year, backed up with a second note just a few weeks ago, is the massive change.

‘Fair value’ is the lens through which you and the rest of the industry need to be seeing the world. But it won’t be good enough to just have the lens. You will need to demonstrate that the decisions you have made have been taken through that lens. The thing that will likely catch companies out is not whether something is fair value, but the demonstration of the way decisions have been made. It’s all in the governance.

This emphasis on good, demonstrable governance, or just customer centric thinking, is the change we will see in 2022. The companies that bake this into their DNA, will be the ones that thrive. Those who try to post-rationalise decisions as fair value, or customer centric, are the ones that will stumble and fall. 

And what is exciting about that change is that for 20 years I have been advocating that what is good for customers is good for employees, is good for the CFO, is good for the shareholders and is good for the regulator. The long-term pursuit of happiness, starting with customers, ending with shareholders, is the future of this industry.

So, here is my commitment to you in 2022. I commit to helping you make confident decisions. Decisions that will see you build the confidence of both new and existing customers. Decisions that will deliver good customer outcomes, and (wait for it) good commercial outcomes. I also commit to working with the wider investment community to reframe what ‘good’ looks like, to help them understand that there is a long-term customer value, ESG, governance lens that makes your business investible — not the next number on your earnings report.

My favourite piece of research we have ever done is a piece where we asked consumers whether knowing they were receiving a fair price from their insurer would encourage them to stay.  They resoundingly said yes. Then we asked the question, if you knew that this insurer would always give a fair price for all insurance, would you buy more from them? The consumers again said, yes.

This is the opportunity. Do what is fair and right, and trust and loyalty will follow. In 2022, make a commitment to doing this and watch your business blossom in this new regulatory world.

I wish you a restful change freeze and festive period. I also wish you a strong, dynamic, and exciting 2022. Thank you for putting your trust in us during this year and I look forward to helping you get to this time next year stronger and more confident as an individual and as a company.

Thank you.

Ian Hughes

CEO, Consumer Intelligence


 

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