"Lifting the exceptional service experience of lower volume Life & CIC claims to the mass markets (of motor, buildings, and contents) could make a real difference to customer outcomes."
Johnny Timpson OBE opened the discussion by reflecting on how far the insurance sector has come (and how far it still must go) when it comes to supporting customers in vulnerable circumstances.
He noted: “It has been more than a decade since the FCA first defined vulnerability and published its Occasional Paper No.8: Consumer Vulnerability and nearly four years since the publication of FG21/1 Guidance for firms on the fair treatment of vulnerable customers.”
Calling for a “coalition of the willing” to take the lead in driving meaningful change, Johnny believes there are six areas that the profession needs to address:
- Customer disclosure,
- Data and management information,
- Inclusive product and service design,
- Leadership accountability,
- Training gaps,
- Mistrust.
Has Consumer Duty had an impact?
Discussing the Financial Conduct Authority’s (FCA) Vulnerability Review, Charlotte Matthews, Manager of Consumer Policy & Partnerships at the FCA, said Consumer Duty has driven a renewed focus on vulnerability, but that progress remains inconsistent.
Although firms have improved in supporting customers in vulnerable circumstances, the FCA found several areas where approaches are currently “uneven or deficient.” Rigid processes, training gaps, failure to embed vulnerability considerations into product and service design, and limited monitoring of outcomes for vulnerable customers were flagged as concerns.
The importance of customer testimonials
The CII invited Claire Massey and Mandy Hunt to share their vastly different experiences as insurance claimants.
Highlighting the severe impact on her life due to what she believes was poor handling by the insurance company, Claire shared her “harrowing” experience with a fire claim.
Delays in receiving alternative accommodation led to separation from her children, while the inability to carry out ongoing maintenance on her period property due to financial uncertainty led to significant deterioration of the home. Claire was also forced to self-fund urgent work, using money from cash settlements intended for contents and other needs.
She believes the insurer should’ve conducted better due diligence at the point of sale, and that her experience underscores the long-term, compounding harm that’s often caused by delays and poor communication during the claims process.
Meanwhile, Mandy had a positive experience with a Critical Illness Cover (CIC) claim. Empathetic communication, regular follow-up calls to check on her husband’s wellbeing, and the personalised nature of the support (based on her family’s needs) were cited as key differentiators to Claire’s experience.
She believes that “lifting the exceptional service experience of lower volume Life & CIC claims to the mass markets (of motor, buildings, and contents) could make a real difference to customer outcomes.”
Why is understanding vulnerability important?
Discussing how to drive better outcomes, the roundtable felt firms must proactively determine which customers are likely to be vulnerable and the specific characteristics of vulnerability within their customer base. “Without this clarity, it’s not possible to effectively address specific needs,” they said.
Furthermore, firms should be anticipating the potential emergence of vulnerabilities over time and determine how this could affect customer interactions with products and services alike.
Firms must develop tailored policies, refine product designs, adjust processes, and enhance communications to meet diverse customer needs. Vulnerability considerations should “permeate every level of the organisation—from product development and underwriting to customer service interactions.”
The roundtable stressed that “disclosure is just the starting point, not the end goal.” Firms must move beyond identifying characteristics of vulnerability to delivering consistent, meaningful support throughout the customer journey.
In terms of next steps, Matthew Hill, CEO of the CII Group, said it will follow the publication of this report with the development of practical guidance. This will help translate the FCA’s expectations and insights from this roundtable into “clear actions, helping firms move from principles to practice.”
The CII will further support the sector with a follow-up roundtable concentrating on data sharing across the distribution chain, as well as a webinar to discuss key issues in more detail.
To read the full report, follow the link here
