1. FCA General Insurance Value Measures Pilot
Update for PROTECT March 2018

2. But first…… a few words on us
MBO completed 9th March 2018
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Largest privately owned Lloyd’s insurer
$1.2b net premiums in 2017
Offices: London, Zurich, Singapore, New York, Chicago, Dublin, Bermuda & China
New COO & CFO appointments announced
4th Year for Specialist Consumer Products team

3. FCA Value Measures - Background
Came out of Add-ons Market Study
Like other findings / remedies – driven by micro economic theory:-
Problem is : Imperfect Market
Point of sale advantage (lack of comparison)
Renewal advantage (customer inertia)
Increased competition requires
Educate consumers on benefits of shopping around (e.g. renewal notices)
Give them the opportunity to shop around (e.g. GAP deferment period)
Give them the tools to compare providers (Value Measures Pilot)

4. Progress to Date
March FS16/1 Feedback Statement confirming basis for Pilot - ‘Scorecard’ approach (c.f. claim ratio) - 4 products : home, PA, key & Home Emergency - 3,000 policy threshold - 36 insurers approached January 2017 – publication of initial data for year ended August 2016 March 2018 – publication of second data for year ended August 2017 Press release 1st March ‘FCA value measures pilot having a positive impact’ “We have already seen examples of where publishing the first set of data has incentivised insurers to make product improvements and focus more on overall product value.” - Christopher Woolard

5. March 18 Report : Home (combined buildings and contents)
Firm
Claims frequency
Claims acceptance rate
Average claim pay-out Banding
Acromas Insurance Company Ltd
0% to 2.4%
97.5 to 100%
£2,000 to £2,499
Admiral Insurance (Gibraltar) Limited
2.5% to 4.9%
90% to 92.4%
£2,500 to £2,999
Ageas Insurance Limited
5% to 7.4%
87.5% to 89.9%
£3,000 to £3,499
Allianz Insurance plc
£3,500 to £3,999
Amtrust Europe Limited
£1,500 to £1,999
Aviva Insurance Limited
95% to 97.4%
£4,000 to £4,499
AXA Insurance Uk Plc
Axis Capital/ Novae Syndicates Limited
85% to 87.4%
£1,000 to £1,499
Canopius Managing Agents Limited
Chubb European Group Limited *
17.5% to 19.9%
£17,500 to £17,999

6. March 18 Report: Personal Accident add-on to motor or home insurance
Firm
Claims frequency
Claims acceptance rate
Average claims pay-out
Acromas Insurance Company Ltd (AICL)
Between 1 in 2,500 policies and 1 in 4,999 policies
95% to 100%
£9,000 to £9,499
Admiral Insurance (Gibraltar) Limited
Between 1 in 100 policies and 1 in 250 policies
£500 to £999
Ageas Insurance Limited
85% to 89.9%
£2,000 to £2,499
Amtrust Europe Limited
Between 1 in 100,000 policies and 1 in 150,000 policies
0% to 4.9%
N/A
Aviva Insurance Limited
Between 1 in 50,000 policies and 1 in 100,000 policies
£50,000 to £50,499
Canopius Managing Agents Limited
£20,000 to £20,499
esure Insurance Limited
Between 1 in 25,000 policies and 1 in 49,999 policies
80% to 84.9%
£31,000 to £31,499
Great Lakes Insurance SE
Between 1 in 500 policies and 1 in 1,000 policies
Liverpool Victoria Insurance Company Limited ++
£100,000 to £100,499
Tesco Underwriting Limited
Between 1 in 10,000 policies and 1 in 15,000 policies
£17,000 to £17,499

7. Observations
Has product performance really been influenced by the pilot reporting?
Pilot is not to assess the ‘principle’ but simply the methodology
Look for further report in Feb/ March next year and roll out to all general insurance products in 2019
Further steps?
Disclosure on each Insurer’s website
Disclosure to customers of ‘scorecard’ at point of sale?
Commission disclosure at point of sale? (raised as a possibility in DP15/4)