Call for Input on access to insurance

Show Feedback Statement (PDF)[1]

Call for Input (PDF)[2]

In this Feedback Statement, we set out how we will work with key industry stakeholders to create a new signposting service which will redirect customers to specialist providers.

This follows responses to the Call for Input which highlighted:

• There is a lack of quality information on alternative options available to consumers after they had received a high quote or had been refused cover, which can cause consumers to assume that they are uninsurable. 
• A general lack of understanding amongst consumers and firms around insurance terms and the risk factors that are considered by providers when calculating the premium.
• The lack of transparency around pricing, the risk factors which drive quotes and how premiums are calculated which limits consumers’ awareness about their options and can mean that they have difficulties in finding competitive insurance that is appropriate for their medical condition.

In May 2016, we published an Occasional Paper exploring issues around ‘Access to Financial Services in the UK[3]’. We analysed the issues we identified through the lens of five major social and technological trends. One of these trends was the increasingly segmented markets in insurance.

The paper recognised how some consumers who had good access to insurance products in the past can find they have become marginalised. We have been keen to understand how consumer outcomes can be improved in this area, whether by traditional methods or innovation, so issued our Call for Input to look at consumers’ experiences of accessing travel insurance.

Who this applies to

The Feedback Statement will be applicable to:

• Providers and brokers of travel insurance
• Trade bodies representing these firms
• Consumer organisations

Next steps

Since we issued the Feedback Statement in July 2018, we have been working with stakeholders to explore different options for signposting people with pre-existing medical conditions (PEMCs) to travel insurance providers that are able to provide them with suitable insurance.

We have carried out an extensive programme of engagement with industry, trade bodies, consumer organisations and charities, through bilateral meetings and larger discussion forums. This has enabled us to refine our understanding of the issues consumers with PEMCs are facing and how we might be able to address them, for example being declined travel insurance, dealing with exclusions for PEMCs and receiving quotes which may be unexpectedly high.

We have been exploring and analysing potential options for signposting structures to help address these issues and ensure better outcomes for consumers by enabling them to find providers who are better able to meet their needs. These potential options include:

1. For the signposting to be hosted by a single source, for example through development of the existing British Insurance Brokers Association (BIBA), Find a Broker Service which is a list of some providers who specialise in PEMCs.
2. For a signposting service to be hosted by a brand-new single source service and to be hosted by an independent body.
3. A multi-lateral approach that provides ‘signposting’ across the industry, but allows providers some flexibility to build their own signposting arrangements.  

There are a number of advantages and challenges with each of the different options. But, having heard the views of many stakeholders, at this stage we believe a multi-lateral approach would build on some of the good practice we are seeing, and would be the most effective and efficient way of improving the way the market is working for people with PEMCs. In addition, we have heard strong support from a number of our stakeholders for a consolidated source of information on insurance providers who offer more specialist cover.

We are considering options for using our rule-making powers to support the effective delivery of this improved sign-posting across the market so that firms are clear on our expectations and consumers experience a consistent journey no matter what their channel of entry to the market.

In our Feedback Statement, we also committed to increasing the understanding that consumers with PEMCs have of the need to obtain good travel insurance, the implications that policy exclusions may present and the factors that impact on policy premiums. So, alongside progressing work on a signposting service we will produce a user-friendly guide to travel insurance for consumers with PEMCs. We will work with our stakeholders, in particular charities and consumer organisations to ensure that consumers can access this guide easily. This will help consumers with PEMCs to understand pricing, exclusions and how to obtain travel insurance that best meets their needs.

Over the next months we will be developing our proposals to ensure that they are delivering the right consumer outcomes and are practicable to put in place. We plan to consult on our proposals before summer 2019.

For more information, please email [email protected]