Insurers have committed to supporting the Financial Conduct Authority (FCA) in its investigation of the protection market, adding they want to ensure “good outcomes for customers” and “a competitive market”.
The regulator announced its review of the pure protection market this morning highlighting key issues across intermediaries and insurers.
These serious concerns included commission structures, fair value of products and insurer market competition.
Health & Protection contacted nine insurers operating in the protection market along with the Association of British Insurers (ABI) trade body for their responses to the FCA’s concerns and its review.
Several insurers did not respond, noting they were still reviewing the FCA’s communication and terms of reference for the review.
‘Ensure good outcomes for customers’
The ABI said it and its members understood the importance of the regulator’s concerns and were looking to work with the FCA as it built up to the investigation.
“Our members understand the importance of providing products that deliver fair value to customers and support all efforts to ensure this is the case,” the ABI said.
“We will work with the FCA on its terms of reference and will continue to engage with our members to ensure good outcomes for customers.”
Echoing this, Aviva said it was “looking forward to engaging with the FCA for the market study into how protection products are sold.”
Legal & General told Health & Protection: “We welcome the FCA’s focus on the protection market and support its efforts to ensure the best outcome for customers.
“We remain committed to distributing through intermediaries and partners and will support the FCA in ensuring we have a competitive market.”
Cirencester Friendly distribution director Alan Waddington said the mutual welcomed this proposed market study by the FCA.
“In a Consumer Duty world, it’s important that both insurers and intermediaries are ensuring consumers get fair value and receive good outcomes,” he said.
“At Cirencester Friendly we aim to always put our members first and support any efforts to make our industry more transparent and fair for all.”
VitalityLife managing director Justin Taurog said ensuring products always offered value, were competitive and appropriate for customers were priorities for the insurer.
“One of the key callouts from today’s FCA announcement is around value, something which we have been talking about for many years now,” he said.
“Being there when someone needs to make a claim must be at the core of all life products, but long gone should be the days where you buy a life product, never to look at the policy document again.
“Tangible, everyday value should be the norm, providing both long and short-term benefits.
“We additionally work closely with businesses that sell our life insurance, to ensure they have the tools to offer our products appropriately and that they are both relevant and provide value to their customers.”
LV= told Health & Protection it focused on providing good customer value and ensuring products provide peace of mind.
“Having seen the improvements Consumer Duty has brought to the industry, LV= welcomes this Financial Conduct Authority (FCA) review,” it added.
Expansive action needed not tinkering
Sourcing system and technology provider IPipeline added it welcomed anything that encouraged “deeper thinking and expansive actions” but the sector did not need “tinkering that further restrains” distribution.
IPipeline product strategy director Paul Yates noted the protection market had stubbornly refused to grow as most would have hoped.
“Any focus on what we do and how we do it which encourages deeper thinking and expansive actions that help us improve the financial resilience of more people, can only be a good thing in my opinion,” he said.
“What we do not need is tinkering that further restrains the distribution of protection.
“I look forward to the output from this study and working together with all industry stakeholders to build a bigger, better protection market.”