The future of general insurance is changing as we know it. New rules introduced by the FCA will not only stamp out age old general insurance pricing practices that disadvantage loyal and vulnerable customers, but also introduce the concept of fair value.
At the end of H1 2022, general insurance firms will be required to evidence that they are delivering fair value to customers. The challenge is that there is no handbook explaining exactly what fair value looks like. It is up to each insurance brand to determine their own internal view of fair value and report accordingly.
Without visibility of how you compare to your peer group, your brand is at risk of being an outlier and could potentially face hefty fines.
The General Insurance 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.
Proactively set actions that will improve your quartile ranking
Understand your fair value performance against your peer group
Confidently attest to fair value compliance
Gain an understanding of your relative revenue as a result of implementation
Identify whether your business is commercially disadvantaged
Make confident decisions based on facts
Whether you're responsible for ensuring your commercial response is proportionate in relation to your peers or ensuring overall compliance, the Fair Value Comparison provides you with the assurance you need to confidently attest and the ability to ensure your business is not commercially disadvantaged as a result of implementation.
By collating the exact same data required by the FCA from insurers in your peer group, we provide a detailed analysis of how you compare.
By combining this intelligence with our full range of data, analytical, fair value and commercial skills, we identify and develop actionable insight that will enable you to ensure you remain compliant whilst positively impacting the bottom line.
As part of the service, you will receive a quarterly report which tracks your performance over time and includes an industry overview, key trends, deep dives and a portfolio overview.
With the Fair Value Comparison, you can be certain of how your compare to your peer group on metrics required by the FCA. This service will provide you with an anonymised but detailed analysis of how your performance, such as your AVP movement and claims ratio movements, compares over time.
With this vital intelligence, you can proactively set actions that will improve your quartile ranking ahead of conversations with the FCA, allowing you to correct your position quickly at minimal cost.
On the commercial front, you will gain an understanding of your relative revenue before, during and after the implementation period, and how it compares in the different elements of your revenue lines. In addition, we can help you identify cause and effect in your competitive footprint over time.
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.
Take a look at our series of short videos where you’ll hear from industry experts answering questions all around the topic of delivering fair value in general insurance, and what it really means to insurers, brokers and customers.
With Ian Hughes, CEO, Consumer Intelligence
With Ian Hughes, Consumer Intelligence, plus special guests James Yerkess & Colin Robinson, HAL Consulting
With Ian Hughes, CEO, and Emma Hart, Consumer Research Manager, Consumer Intelligence
With Ian Hughes, CEO, and John Blevins, Head of Product, Consumer Intelligence
By combining our comparison service with our complementary Fair Value Framework, we can provide you with greater assurance and evidence that your approach to PS 21/5 is compliant. 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.
Fair Value Framework
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.