The Financial Conduct Authority (FCA) has published the first set of data in their general insurance value measures pilot, covering the year ending 31st August 2016.
In their general insurance add-ons market study, the FCA found poor value in both add-on and some stand-alone products sold by firms. They also found that consumers find it difficult to assess value due to the lack of a commonly available measure.
To help address these issues the FCA set out in their subsequent feedback statement that they would pilot the publication of value measures data. These data include claims frequencies, claims acceptance rates and average claims pay-out by insurer for four general insurance products:
- Home insurance (combined buildings and contents)
- Home emergency insurance
- Personal accident insurance sold as an add-on to motor or home insurance
- Key cover sold as an add-on to motor
By publishing these pilot data, consumer groups and market commentators will have commonly available indicators of value for insurers by which to help assess products. Firms may also use the data to compare to their peers. The FCA expects that use of the published data by these stakeholders will improve transparency in these markets and influence both consumer and firm behaviour, incentivising firms to improve the value their products offer to consumers. The data are not targeted at individual consumers, although they recognise that a small number may use the data directly.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
“We want stakeholders to have access to a wide range of information about the value of general insurance products that goes beyond price. We expect the pilot publication to help incentivise firms to improve the value they offer consumers. The pilot will allow us to refine the value measures and obtain further evidence of the effectiveness of these measures ahead of any potential consultation.”
In addition to these data the FCA will publish further pilot data for the year ending 31 August 2017 and will consider a further publication of data for the year ending 31 August 2018.