Insurers just days away from step change in demonstrating value

Ahead of the FCA’s new rules on product governance* coming into force on Friday, 1 October, James Hillon, Director, General Insurance, KPMG UK, comments:

“Insurance firms are just days away from a step-change in how they demonstrate that their products offer customers good value. This first FCA deadline marks a significant milestone in the leap towards a more customer-centric industry.

“The fact the FCA felt it necessary to issue a warning signal to firms about their level of readiness indicates that some are in the middle of a sprint finish right now, however, the majority of firms we have come across are making sure and steady progress. But October 1^st is the starting point and not the finish line. The bumps will come later as we potentially see firms interpret ‘good value’ in different ways.

“Until the new rules are well embedded there’s a risk that we will have an uneven playing field as some firms are more stringent than others in their definition of good value. This could become even more pronounced when the new rules, in relation to car and home insurance pricing, hit at the end of the year. This is something the FCA will be watching closely.”

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*This is part of the wider reforms being introduced following the General Insurance Pricing Practices Market Study

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About KPMG

KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff.  The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.

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