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Mike Timmons Insurance Director January 2014 Excellence | Flexibility | People | Teamwork | Integrity | Passion Protect Association.

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Presentation on theme: "Mike Timmons Insurance Director January 2014 Excellence | Flexibility | People | Teamwork | Integrity | Passion Protect Association."— Presentation transcript:

1 Mike Timmons Insurance Director January 2014 Excellence | Flexibility | People | Teamwork | Integrity | Passion Protect Association

2  To have a sunlight remedy which will shine a light on product value enabling better customer insurance purchase decision making  To achieve this the FCA consider that the publishing of claims ratios ( in its simplest form the ratio of claims costs to premiums received) as being, in most cases, the preferred measure to shine the ‘LIGHT’

3  Personal Lines including add on and standalone products  Some exceptions – not yet defined  Claim ratio will be the pure claim cost as percentage of the ultimate selling price therefore it will include  Include Commissions  Exclude claim handling costs  Exclude other expenses and costs  Possible for last 3 to 5 years claim ratios to be published

4  The cost to the consumer of not insuring  Ability to calculate an accurate claims % ratio when selling prices vary  Tailored and non-standard products  Insurers’ costs v consumer’s costs  Steering suppliers away from the most suitable products  Protecting distribution chains to secure consumer choice

5  FCA holding third working group meeting today  Will be examining ( amongst other areas) o What contextualisation would be most useful? - High level (e.g. what does a claims ratio show/take into account, what does it not) - Product specific (e.g. explanations about why certain products’ ratios will fluctuate) - Firm specific (e.g. explanations for why there may be peaks and troughs i.e. changes in policy wording) - A combination of the above o Would different contextualisation approaches be needed for different stakeholders? o Which products require specific contextualisation o Are there any products for which contextualisation will not work/will not aid understanding o What is the best format for the claims ratio publication? E.g. comparison tables, league tables etc.

6  Any thoughts and comments?


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