The Financial Conduct Authority (FCA) has today announced that it will pilot the publication of general insurance ‘scorecards’ on a small number of products.
The FCA will collect data from firms and publish it in an easily accessible format on its website. Any interested parties including consumer groups will be able to use the information to compare both products and firms.
Christopher Woolard, director of strategy and competition at the FCA, said:
“We believe that publishing a range of information will help to boost competition between firms, encouraging them to focus on improving the value and performance of their products, whilst giving stakeholders and consumers more insight into the value they offer.”
The changes aim to demonstrate how often consumers are likely to claim on a product, how likely those claims are to be accepted and the average claims pay-out.
The results of the pilot will be used to inform any consultation on the use of such measures.
In July 2014, the FCA published the results of the general insurance add-ons market study which showed that competition was not working well for many consumers. In June 2015, the regulator proposed a number of options for publishing product information, including:
- Claims ratio as a stand-alone value measure
- Claims ratio plus claims acceptance rates, and
- Claims acceptance rates, claims frequencies and average claims pay-outs (the scorecard).
The pilot will last for approximately 12 months and include two publications of the data - one at the start and one at the end of the pilot. This will inform and help the FCA refine any proposals on which we may consult. It will also provide further insight into the expected costs and benefits.
The pilot will launch in summer 2016. The FCA will continue to engage with stakeholders around the pilot design ahead of the launch.