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FCA Dear CEO letter on protecting customers wellbeing in cost-of-living squeeze

We know you want the best for your clients, so here at LV= GI Intermediaries, we wanted to share some news following the FCA’s expectations about protecting customers wellbeing, in a cost-of-living squeeze and how we’re helping support our customers.

The FCA has written to Insurance CEO’s urging insurers to take steps to protect customers facing financial difficulty, due to the current cost of living crisis. They’ve also issued a press release to the market to help drive wider awareness.
 
LV=GI for Intermediaries is already providing high levels of customer support and this holds true as we review ourselves against the FCA’s expectations. 

It also helps to highlight several benefits that financial advisers tend to help customers with, further underlining the value they provide, as we head towards the implementation of the Consumer Duty regulations

Financial watchdog warns insurers to protect customers’ wellbeing during cost of living squeeze (govdelivery.com)

The main relevant highlights from the FCA letter

Reassessing customers’ needs 
This is a key benefit provided by so many firms in the financial advice industry. Now more than ever, customers need sound, skilled advice to help them make the right decisions, so they can achieve their goals and support their financial wellbeing.   

Considering if there are other products that better meet the customers needs
This sits alongside reassessing customers needs - our recent campaign about helping advisers have the tools they need to provide a reassessment of the customers home insurance needs, at time of re-mortgage, really supports advisers in helping their clients. 

Providing clear information to consumers about the additional cost of premium finance 
LV= GI Intermediary Home and Landlord insurance products don’t charge additional fees for monthly payments. Our approach is for clear, simple premium breakdowns, that customers can easily understand. Premium finance options are also used more often by customers who are more likely to be impacted by financial stress and the cost-of-living crisis, or deemed vulnerable for other reasons, so extra attention is needed in this area, if a product with premium finance is sold.

The FCA specifically states firms need to consider premium finance as part of their fair value assessments. Firms should be able to demonstrate how they’ve considered this additional cost, including the relationship between the price and the quality (such as, the benefit of spreading the cost). 

Our proposition both removes these considerations, but even more importantly supports customers to spread the cost of being adequately insured, without an extra cost.

Waiving fees associated with adjusting a customers policy in line with the reassessments 
We don’t charge customers to make mid-term adjustments to their policy, only the cost of any increased insurance / risk premium. If customers need to appropriately reduce cover to make savings, they don’t have to pay additional fees to do so.

Considering whether cancellation fees should be removed for customers in financial difficulty 
As part of our transparent pricing approach, we don’t charge cancellation fees.

Need some further help?

We’re always on hand to help you, our Advisers, with any questions or queries you may have, so please get in touch with our teams if you need any further help.

Many Thanks

Sarah Watts 
Head of Intermediaries

This article was first published in November 2022