From June 2022, general insurance brands are expected to evidence to the FCA that their products and services deliver fair value. They are also expected to formulate their own individual approach to measuring fair value.
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.
You are also able to benchmark your performance against the market and your peers, allowing you to see where you need to make improvements and formulate a plan ahead of FCA intervention.
But that's not all. By understanding and successfully delivering the ultimate fair value experience according to you customers, you have the opportunity to generate positive business outcomes. This is your chance to increase retention, improve brand perception, and increase recommendations - allowing you to compete on more than just price.
Evidence fair value compliance to the FCA
Understand your fair value performance against the market and your peers
Build a deep understanding of what fair value means to your customers
Inform internal reporting and support alignment
Tailor your approach to fair value to meet the expectations of your customer base
Make confident decisions based on facts
Whether you're responsible for establishing an internal view of fair value, ensuring your commercial response is proportionate in relation to your peers, evidencing adherence to new product governance requirements, ensuring overall compliance or ultimately deciding your firm's approach to fair value, our framework provides you with the intelligence you need to make confident and informed decisions.
The framework is built on a foundation of extensive research that establishes the customer perception of fair value, augmented with data benchmarking of product features such as APR and fees and charges.
The research sets out the 15 most important components of the customer experience an insurance brand must deliver well against for a customer to feel they have received fair value.
The research also identifies the relative importance different customer groups place on the various components, as well as ranking insurers’ performance against them.
The Fair Value Framework allows you to truly understand what fair value means to your customers and deliver an experience that meets their expectations.
In addition, and most crucially, you will be able to evidence your successful delivery of fair value - or alternatively, a thorough understanding of where improvements need to be made - to the FCA.
With a view of where you sit in the market and against your peers, you can identify a clear set of actions that allow you to compete on more than just price.
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.
We have created a series of short videos to help inform you with all of the knowledge on fair value. We partnered with the FCA, HAL Consulting who have experienced this in the banking world, and our own internal experts to give you all the information to be a fair value genius in no time.
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 the Fair Value Framework service with our complementary Fair Value Comparison service, we can provide you with greater assurance and evidence that your approach to PS 21/5 is compliant. Together, 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 Comparison
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.