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The UK’s Financial Conduct Authority (FCA) has issued a stern warning to insurers, highlighting persistent issues more than a year after enhancing protections for policyholders. The FCA’s thematic review of the general insurance sector exposed poor customer value and potential risks arising from inadequate product governance, oversight, and control mechanisms.
Despite some improvements, many insurers have yet to implement robust frameworks that demonstrate why their offerings provide good value, according to the FCA. The watchdog particularly noted firms’ failure to consider the total cost of policies, including the impact of remuneration on overall value.
Matt Brewis, the FCA’s director of insurance, acknowledged ongoing progress but emphasized that too many insurers and brokers still lack crucial information, governance, and oversight to ensure consistent good outcomes for consumers. The FCA introduced the Consumer Duty in July 2023 to mitigate years of mis-selling scandals. Recent data from the FCA indicated varying value in insurance products, prompting further scrutiny and potential intervention to safeguard consumers.
(With inputs from agencies.)