FCA Consumer Duty

Customers are already fundamental to the way we think at Ageas – it’s how we focus on delivering brilliant service, where it matters. We simply put them first in everything we do. But this has been a great opportunity for us to carry out a thorough and targeted review, identifying how Consumer Duty impacts our business.

Here’s some of what we did:

 ✓ We’ve reviewed internal policies and governance groups to ensure the Consumer Duty is embedded at the heart of our business.

 ✓ We’ve begun rolling out e-learning to all our staff, bringing them up to speed on Consumer Duty and what it means for their roles.

 ✓ We’ve also been linking in with our suppliers to make sure they are responding to the Consumer Duty requirements.

Firms must act honestly, fairly, and professionally in the best interests of customers, so that those customers can make informed choices. Firms must prioritise the customer's needs over their own interests, for example, avoiding using sales practices that exploit behavioural biases.

Here’s some of what we did:

✓ We’ve been reviewing and testing parts of the customer journeys to identify any unreasonable barriers or risks of harm, in addition to identifying where there’s room for improvement.

✓ Organisation-wide, we’ve been identifying high risk communications which are key to customers’ decision making so that we can review and test customers’ understanding.

The FCA require us to identify areas of potential harm for customers in the context of their insurance products, as well as premium finance arrangements. That includes vulnerable customers who may need more tailored or additional support, post-sale barriers when it comes to cancelling, switching providers, making a claim, or lodging a complaint – and fair value: we must not charge customers unreasonable fees or commissions.

Here’s some of what we did:

✓ We’ve reviewed all Ageas-owned products, including the policy wordings, to assess where any risks may be and to identify potential poor outcomes.

✓ We’ve reviewed every part of our customer experience and journey touchpoints to identify areas of potential harm.

✓ We’ve started building Management Information tools that will support our oversight of the outcomes that customers experience across the product lifecycle to help us continually learn and improve.

The FCA wants firms to act to enable and support customers to pursue their financial objectives. In other words, firms need to support customers to make informed decisions about the products and services they purchase and ensure customers do not experience any unreasonable barriers (including unreasonable costs) when trying to make a change, lodge a complaint or make a claim.

Here’s some of what we did:

✓ We’ve been building on the oversight and governance we have in place already, reviewing all controls, processes, and templates to understand if any updates are needed to improve outcomes for customers and for us to comply with the Consumer Duty requirements.

✓ We’ve launched some enhancements to the support we provide to vulnerable customers, including mandatory training to our frontline staff.

✓ We’ve also been reviewing our target market statements to ensure our products meet these and match the profile of the customers buying them.

• Customers understand the options available to make a claim.
• Customers who want to report or talk about a claim can do so without having to wait for an unreasonable amount of time. Or, if there’s a surge in calls that makes this unavoidable, then they’re informed of the approximate time they’ll have to wait and given other options for making contact.
• Customers get an appropriate standard of support that meets their needs throughout the claim lifecycle, including those customers who might be identified as vulnerable.

• Customers find it hard to understand their settlement, as documents contain jargon.
• There are unfair barriers to claiming, such as unreasonable burdens around proof of ownership and proof of loss of an item.
• Customers can’t submit a complaint, or there is a ‘2-stage process’ where customers who complain obtain a better outcome than those who don’t.
• There are unreasonable delays, requiring high levels of customer effort and potential distress and inconvenience.
• Customers are given generic advice where they are experiencing financial difficulty, without considering their individual needs.

We’ve set up key performance indicators (KPIs) in line with the outcome measures set out by the FCA, and we’ve reviewed our timely management of claims and associated measures such as day one settlements, average lifecycles, average cost per claim.

We’ve conducted customer testing as well, to make sure we’re creating documents that can be understood easily. This includes standard claims letters, and Electronic Notification of Loss (ENOL).

We’ve also been looking at our Claims Acceptance Rates, ensuring they’re aligned to FCA Value Measures definitions, and at Complaints Management Information: complaints rates, uphold rates (FOS and internal) and the amounts of redress paid.

When firms communicate clearly and fairly, consumers have access to more transparent information about financial products and services. This helps them make more informed decisions and avoid products or services that aren’t suitable for their needs.

The principles make firms responsible for outcomes of their products and / or services. This encourages them to ensure those products and services are good quality and provide fair value to customers.

By promoting a customer-centric culture and getting firms to act in their best interests, customers are more likely to have faith in our products and services. The Consumer Duty should improve consumer trust in our industry.

The principles aim to reduce the risk of consumer harm by providing products and services that meet customer needs and don’t have unreasonable barriers to access or use. This will support customers and improve their understanding of the products they’re buying - preventing consumers from inadvertently purchasing products that are unsuitable or too complex for their needs.