The FCA has published a discussion paper (15/4) that seeks to address ineffective competition in the general insurance (GI) add-ons market. The FCA hopes to collect and publish a measure, or measures, of value to increase transparency in GI markets; incentivise firms to improve product value; and explore the case for a future extension of any measure(s) to be disclosed to consumers in due course.
The FCA measures ‘value’ by the quality or benefits offered by a product relative to the price paid for it. The FCA says key elements of a good quality product might include: broad cover with few restrictive terms and conditions; a good sales process that leads to engaged and informed consumers making good decisions; a good claims service; and efficient distribution that does not erode value or drive up premiums.
The discussion paper can be read here.