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Insurance multi-firm review of outcomes monitoring under the Consumer Duty

Jun 29, 2024 2:47:00 PM

Summary 

Under the Consumer Duty firms must regularly assess, test, understand and evidence the outcomes their customers are receiving. Without this, it will be impossible for firms to know that they are meeting the requirements set out in the Duty. 

This publication sets out the key findings from our review of larger insurance firms’ approaches to outcomes monitoring under the Duty.  

We recognise this represents a new expectation of firms and have set out examples of good and poor practice to help all firms raise their standards where necessary. 

Firms that identify gaps in their compliance with our rules should act immediately, putting robust plans in place to address any shortcomings.  

In December 2023 we requested the most recent board and/or committee reporting from 20 larger insurance firms. These included general insurers, life insurers, insurance intermediaries and regulated third-party outsourcers which service insurers.  

We asked firms to show how they monitor, assess, and test the outcomes customers are receiving, along with actions firms had taken after identifying poor outcomes. We assessed the submissions against the monitoring requirements set out in PRIN 2A.9, as well as the guidance given to firms in Chapter 11 of FG22/5: Final non-Handbook Guidance for firms on the Consumer Duty. 

We used our assessments, along with our existing supervisory knowledge of firms, to: 

  • determine themes in firm approaches 
  • identify the good practices firms have employed to be consistent with the Duty  
  • assess whether there are areas of improvement needed  
The review was focussed on outcomes monitoring only and did not include any assessment of underlying processes (such as value assessments) or consider whether firms were meeting the other requirements of the Duty. 

We conducted this review of larger firms to test the implementation of these new requirements and to share findings. There are proportionality rules in place, and we expect smaller firms may take a different approach, applying a commensurate level of resource and with simpler governance/processes. But all firms have a Duty to act to deliver good outcomes for their customers. For further information on proportionality and other topics that firms ask us about, refer to Consumer Duty – information for firms. 

Links: https://www.fca.org.uk/publications/multi-firm-reviews/insurance-multi-firm-review-outcomes-monitoring-under-consumer-duty