The insurance landscape is no stranger to regulatory changes, and UK insurers are once again gearing up for a significant shift. Set to take effect in July 2023, a new regulation is making its way onto the scene, causing ripples of anticipation and preparation throughout the industry. In this article, we delve into the details of this emerging regulatory change and address the top areas from UK insurers.
Beginning in late-July 2023, the insurance industry will see the implementation of the new Consumer Duty regulation, aimed to enhance consumer protection and transparency. Under this new framework, insurers will be required to prioritise the best interests of their customers, treating them fairly and providing clear and accessible information. The Consumer Duty regulation also places emphasis on ensuring that consumers have access to suitable products and are provided with fair value throughout the lifecycle of their insurance policies. With its focus on strengthening consumer rights and improving overall customer experiences, this new regulation is set to bring about a paradigm shift in the way insurers conduct business and operations.
To support insurers to prepare for the change, this is your roadmap to the four elements of the new regulation and how to ensure compliance by July 31.
- Consumer understanding
Consumer understanding is the first of four core requirements of the new Consumer Duty regulation, which places responsibility on insurers to guarantee timely and clear customer information. Throughout all stages of the customer journey, the regulation ensures that customers are empowered with a robust understanding to make informed financial decisions. As the deadline for compliance grows near, insurers must begin to consider an audit of customer communications collateral and processes, to ensure compliance by July 31. With the support of a strategic partner, insurers can swiftly renew customer communications backed by expert communication strategies, to not only ensure compliance but outpace the competition as nationwide insurers turn their focus to this area. A strategic partnership alleviates these pressures and can offer guidance on implementing effective communication processes, supported by the necessary tools and technologies to streamline customer interactions.
- Products and services
Insurers are now also faced with a regulatory provision that mandates the alignment of product lines with customer needs, placing weight on the prioritisation of customer-driven products, as opposed to high-profit lines. To ensure compliance with this pillar, harnessing advanced data capabilities is key. By partnering with a strategic claims partner, insurers gain access to invaluable digital tools that enable them to accurately analyse data insights, including identifying high-demand product lines, assessing claims data, evaluating performance metrics, and uncovering growth opportunities. Among these tools are Gallagher Bassett’s digital experience infrastructure, benchmarking, and dashboard capabilities, which empower insurers to make well-informed, data-driven decisions regarding compliance requirements, growth strategies, and expansion of product lines in accordance with the new Consumer Duty regulation.
- Consumer support
At its core, the new regulation is designed to elevate the standards of consumer protection and requires insurers to put customer needs first. This includes a newly formalised requirement for insurers to solve customer issues quickly and effectively. From streamlining claims outcomes to appropriate customer complaints handling processes, this pillar is all-encompassing in the delivery of superior customer service. In today’s industry, customer expectations are adapting and changing, leaving insurers seeking strategies for longevity, customer retention and a competitive edge. In accordance with the looming regulatory change, insurers are encouraged to seek the support of claims experts to keep pace with industry demands and implement best-practice claims management. At GB, our claims experts become an extension of your team no matter when or where a client demand arises. Leveraging the efficiency of our proprietary systems, people, and processes to deliver a consistent, benefit-driven experience for your insureds is the path forward for business success and seamless compliance with changing customer-focused regulations.
- Price and value
The final aspect of the Consumer Duty regulation refers to price and value, ensuring that pricing strategies are transparent and offer fair value to customers. Partner-sourcing can assist in evaluating pricing models to ensure compliance with regulation, optimised pricing strategies and deliver expertise in pricing and market insights. By leveraging comprehensive market data and benchmarking technologies, such as GB’s SMART Benchmarking tool, insurers are empowered to deliver competitive, sustainable, and compliant value to customers.
To learn more about how we can support your business to keep pace with changing regulations and implement strategies for long-term success, book a free consultation today.