Insurers, distributors and other financial services providers have been warned by the industry watchdog to ask themselves if products with Covid exclusions or other significant restrictions offer customers fair value.
And the Financial Conduct Authority (FCA) also reminded firms to be sure they were acting appropriately in the current economic climate.
FCA director of insurance Matt Brewis raised the issue of Covid-related exclusions at the Association of British Insurers (ABI) Achieving good outcomes under the Consumer Duty webinar.
These exclusions have become commonplace in some products, but Brewis questioned whether they offered value to customers and if customers were aware of the situation.
“As we hopefully come out of the pandemic, there are certain products which now have significant exclusions towards Covid,” he said.
“I completely understand that, but the question is, does it change whether the product is offering value to the customer?
“Does the customer understand what it is they are buying and that it has those exclusions in place? “How are we communicating with customers what is covered and what is not covered?” he asked.
Brewis also highlighted the current economic climate and the soaring inflation and cost of living which is seeing many people struggling financially.
He turned his spotlight on the industry and whether firms were acting sensitively towards their customers.
“At a time of significant inflation, what is your firm doing to ensure the products you sell are of value to consumers?” he continued.
“How are you treating your customers who have contacted you in financial difficulty? And are the costs of some of your products justifiable given the risks?” he added.
