However, head of consumer strategy says there can be ’really good benefits’ in the long-term
The new Consumer Duty regulation has come into force today (31 July 2023) – but it is still causing “headaches” for insurers.
That was according to Catherine Carey, head of consumer strategy at consultancy Consumer Intelligence, who said the industry was facing chalenges due to the new regulation being a resource-heavy and costly process.
Consumer Duty creates new requirements for firms within the sector to ensure – and crucially, evidence – positive customer outcomes around four metrics, which are products and services, fair value, consumer understanding and consumer support.
Carey said this represented significant extra regulation for firms operating in the general insurance market and had created considerable extra work where reporting was concerned.
However, she felt that the shift to a customer-focused approach can help bolster their reputation.
“By prioritising customers’ needs and ensuring fair treatment, insurers can build loyalty and trust, leading to increased customer retention and new business opportunities,” Carey said.
Benefits
Figures released by technology and management consultancy Capco earlier this year (17 July 2023) revealed that 47% of consumers said that an insurer’s reputation mattered most – beating ease of the application process (42%), scope of insurance coverage (37%) and speed of service (34%).
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The firm surveyed 13,750 policyholders aged 18 to 65 across the UK, US, Switzerland, Germany, Belgium, Poland, Italy, Canada, Brazil, Hong Kong, Greater Bay Area (ex Hong Kong), Singapore, Thailand and Malaysia during February and March 2023.
Carey said that once trust and customer loyalty was established, businesses must focus on retaining their existing customers over time.
She explained that this ongoing effort was essential for maintaining a ”successful and sustainable” business.
She said: “There should be some really good benefits for the industry.
“There’ll be increased trust [and] increased customer loyalty.”
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