A 19-page white paper from the Chartered Insurance Institute sets out to support firms' compliance with reporting requirements under consumer duty.
The Financial Conduct Authority regulations which were introduced in July 2023 require firms to produce board reports on how they achieved consumer outcomes.
In July this year the CII asked its members to outline the challenges they have faced.
The report, in partnership with FWD Research, found firms had trouble finding and reconciling data.
It said: "Those who contributed told us that evidencing outcomes for vulnerable customers was the most significant challenge they had encountered, with data availability a closely related issue. Integrating data and showing the relationships between different data sets were also challenging."
Respondents told the survey they would benefit from assistance to better understand the characteristics of vulnerability and identify vulnerable customers.
They also wanted advice on storing and sharing the information of these customers.
CII Group chief executive, Matthew Hill, said: “We are sharing our findings and recommendations with the FCA and the wider sector through this white paper, and we will continue to explore with the regulator and our members what more we can do to assist firms in meeting the standards of care expected from the introduction of the consumer duty.”
While some firms were worried about how much time was being invested in the reporting process, others said it had helped to shape internal conversations that had already driven positive changes for their customers.
Most firms said they would welcome more guidance from the regulator on how they should meet the reporting requirements.
The CII made the following five recommendations to firms:
- Firms should ensure that data and reporting requirements are used not only to satisfy reporting requirements, but are baked into product, service and process improvement cycles, as well as the design stage for new products, and are used to create the causal chain the FCA has identified as best practice
- Firms should work with professional bodies to develop research best practice, for example on survey methodology and the analysis of unstructured conversations
- Firms should identify whether they have a robust understanding of vulnerability for their customer base that enables them to develop informed vulnerable customer strategies that will lead to good outcomes for all customers
- Firms should place more emphasis on joining the data dots around individual customers or customer groups in real time, challenging assumptions and exploring data insights across multi-disciplinary teams to effect positive change for them
- Leadership teams in firms should take active interest in reviewing customer needs for each of their entities, being the voice of the customer, to ensure continuously improving outcomes are prioritised.
The CII said in the next few months it will be introducing solutions to help insurers and brokers better implement the consumer duty.
tara.o'connor@ft.com
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