UK insurers behind on treating customers fairly?
A study by accountant and business consultant Moore Stephens suggests that while some progress has clearly been made in the effort to meet the FSA’ s Treating Customers Fairly (TCF) deadline, there remain serious doubts about whether the UK insurance industry will be able to put in place the necessary procedures and systems to embed it into their business operations.
The findings show that 40% of insurers have not yet incorporated TCF into their business strategy, and only 50% of respondents overall are ‘extremely confident’ of meeting the FSA’s year end 2008 deadline for compliance.
Overall, 95% of all respondents claimed that TCF information was discussed at board level and this may seem to satisfy the FSA requirement that TCF procedures must be reviewed, challenged and acted upon at a senior level. But only 8% of insurers, and 24% of intermediaries, said that TCF was reviewed on a monthly basis.
While 83% of intermediaries said they had management information and key performance indicators to clearly identify how customers were being treated fairly, only 69% of insurers claimed the same. Only 26% of insurers, and 37% of intermediaries, were able to report that all their employees had been trained in TCF. Just 2% of intermediaries and 9% of insurers reported that all management had been trained in TCF.
The survey revealed that only 4% of insurers could claim that all their TCF related work had been documented, compared to 20% for intermediaries.
Simon Gallagher, head of the Moore Stephens Insurance Industry Group said, ‘Insurers and intermediaries would be well advised to weigh these outcomes against their current TCF performance’.
The FSA aims to use TCF work to deliver improved outcomes for retail consumers. By the end of December 2008 all firms are expected to be able to demonstrate to themselves and to the FSA that they are consistently treating their customers fairly. More information from www.fsa.gov.uk/tcf.
