Blog: Regulation, the FCA and value – how to stay on track when choosing products and partners?


Ian Lloyd from RAC explains why breakdown insurance is still relevant today, despite improvements in automotive technology, and what brokers need to consider when selecting products for their customers.

With the Financial Conduct Authority's new Value Measure Ordinance set to be the next big thing since the Insurance Distribution Directive in 2018, it is more important than ever for brokers to ensure that the products they choose are relevant to their clients.

It was inevitable that the ancillary market would come into the spotlight as products and underwriters in the area expanded and that some ancillary products offered customers little product value or were not what they needed.

Relevant
Good news; with almost 33 million cars on the United KingdomOn the road, breakdown insurance is still absolutely relevant in the brokerage sector. The most important consideration for brokers here is to choose their ancillary insurer carefully, as not all products and claims processes are created equal.

Solid product governance has always been important, but as claims emerge, this will soon become critical as companies need to report and demonstrate how their products deliver real customer value.

In recent years, the breakdown industry has seen a consistently high volume of breakdown damage despite changes in the automotive industry.

The volume of vehicles on United Kingdom Roads are higher than ever and the types of vehicles are becoming more complex with the growing popularity of electric and hybrid technology. It's a common myth that breakdowns will decrease as automotive technology improves. Regardless of how reliable vehicles become, we continue to see tire and battery faults as the most common causes of breakdowns. For brokers, the breakdown is as relevant to clients today as it has ever been.

In addition to the need for providers such as breakdown services to make their products and services suitable for the motorist, it is also the responsibility of insurance brokers to select the right provider for their customer base.

Result
Roadside vehicle repair has the greatest impact on the customer experience, so it should be a key factor when choosing a breakdown vehicle. Factors that deliver a positive customer result at the time of the complaint are probably even more important in this process.

Another consideration is the quality and clarity of the product that a broker is offering to their client. Does the provider offer coverage that meets the customer's needs? For example, is it really in the customer's best interests to choose local pick-up at the nearest garage or home address, or is it a better option to offer the customer a wider range of solutions at the time of the claim?

The new FCA The regulation of value standards is already fueling these types of issues in the insurance industry and the time is right to act and ensure that brokers are delivering the right products to clients and, more importantly, through the most trusted leading third-party channels.

Ian Lloyd is Head of Technical Product at RAC

https://dailytechnonewsllc.com/blog-regulation-the-fca-and-value-how-to-stay-on-track-when-choosing-products-and-partners/

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