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