The General insurance industry may face further significant changes following the first part of the FCA’s report ‘General insurance add-ons: Provisional findings of market study and proposed remedies’. Click here to read the full report.
The report looks into the behaviour of consumers buying add-ons and the effect different selling tactics have on their willingness to shop around for the best price. The FCA has made a number of conclusions that will no doubt lead to future changes in the process of selling add-ons.
A summary of the findings are written below:
- Add-ons stop customers from shopping around and makes them less price sensitive when they do. This results in fewer consumers getting a product that is good value for money.
- Offering add-ons at the point of sale, often results in consumers ending up with add-ons that they do not need or use.
- Many consumers are not aware that they could buy the product separately elsewhere.
- Weak consumer engagement increases the point of sale advantage enjoyed by firms selling add-ons. This acts as an incentive for firms to sell products that might not meet consumers’ needs.
Within the report, the FCA outlined a number of proposed remedies that it will be enforcing towards the end of the year. Providing consumers with more information about the product they are buying and alternative products seems to be high on the FCA’s agenda.
The report talks of a better use of price comparison sites, again providing consumers with more detailed information on each add-on.
The report also suggests that information should be more relevant to each consumer, this way firms will avoid advertising add-ons to a customer that doesn’t want or need them.
By making key systems within your enterprise more accessible, you can begin to act upon these upcoming challenges. Integrating this information from various systems within your enterprise, it is possible to get the relevant information to the consumer who you are offering products to, in real-time.
Contact us to find out more.