Briefing: Firms should treat Consumer Duty as reflection of values – not just a compliance requirement

Peter Drucker’s famous line – “culture eats strategy for breakfast” – has been repeated so often it risks becoming cliché, but in insurance it’s never been more relevant.

Because while strategy may shape ambition, culture determines execution. And no amount of compliance manuals can fix a culture that doesn’t value customers at its core.

The FCA’s Consumer Duty has forced every insurer to take a long, hard look at what delivering good outcomes actually means. Boards are documenting, measuring and evidencing fairness in ways the industry has never done before.

That’s progress – you can’t improve something if you aren’t measuring it after all. Indeed, one of our aims at Insurance DataLab is to help the industry evidence customer outcomes clearly, benchmark their performance and turn transparency into tangible improvement.

The ’real’ Consumer Duty test

But in some quarters, the Duty still feels like a project – a checklist to be ticked off and archived – rather than the cultural shift it was intended to be.

The regulator can mandate behaviour, but it can’t legislate belief. Culture is what governs the decisions made when no one’s watching – and that’s what ultimately builds or breaks trust with the public.

Most insurers genuinely want to do the right thing. They want to pay valid claims, serve customers well and maintain trust in the long-term. But when commercial targets collide with customer outcomes, it’s the company culture that decides which side wins.

If the tone from the top prioritises cost over care, even the most detailed frameworks will fail.

That’s why it’s important to remember that the real test of Consumer Duty isn’t in the paperwork. It’s in the everyday decisions that shape trust. And the Which? super complaint shows just how much is left to do before the industry can even start to rebuild this damaged trust.

Firms that treat the Duty as a reflection of their values – not just a compliance requirement – will find that culture does most of the heavy lifting for them. The documentation is just the evidence of that intent, it’s the underlying purpose that will determine who the winners and losers are.