The UK’s Financial Conduct Authority (FCA) has initiated a consultation process for proposing new rules for companies to disclose the value measures data for general insurance (GI) products for publication.
Previous work undertaken by the FCA revealed issues of poor value in the GI market. The financial regulatory body came to a conclusion that there are no regularly available measures to review the value for money of GI products.
A market study by the regulator confirmed that selling a product as an add-on frequently resulted in consumers buying products that were of poor value and not what they required. FCA, through the study, also observed that the value of general insurance products was not always clear.
In an effort to address such issues, the regulator said that it has been piloting the publication of value measures data with companies since 2016.
The regulator claims that the pilot made a positive impact in the market while enhancing transparency and awareness of a common set of measures of product value. Furthermore, the pilot has helped companies to study the value of their products and make enhancements.
The FCA proposes to expand the scope of value measures reporting to include most GI products. It is also looking to implement an additional measure to identify where consumers are not happy and had registered a complaint as part of the claim process.
The consultation launched by the regulator also recommends that companies should use the value measures data when considering whether their products provide value to their customers as needed by its existing rules.
FCA Strategy and Competition executive director Christopher Woolard said: “It is encouraging to see that the value measures pilot has been successful and that firms have already been using the data to make changes and product improvements.
“We have identified poor product value as a key area of harm in this market. The proposals we have set out today aim to increase competition on product value, which will benefit firms and consumers.”
The regulator is currently looking for comments on the proposals it has set out in the Consultation Paper, which will be open till 30 April 2019.