Insurance in Financial Services UK
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Complaint reduction should be a priority for every firm. A robust and structured complaint reduction strategy can deliver many advantages, for example:
- The customer experience is improved as issues which could have caused complaints are identified and resolved.
- The morale of front-line staff can improve if they are given the knowledge and skills to resolve customer concerns before they become complaints.
- The potential to reduce reputational risk through the identification and elimination of common complaint causes, leading to less likelihood of negative regulatory or media activity.
- A potential reduction in complaint processing costs as incoming volumes, ombudsman referrals and re-worked complaints decrease.
By 2050, the UK population is projected to grow by almost 20%, to 77 million. By contrast, the populations in Germany, Italy, and the Netherlands are projected to decline. The investment management industry stands to benefit from the long-term opportunity presented by population growth in the UK, in spite of the challenges brought on by changing regulation, the pace of innovation, and the growing demand for low-cost products and services.
Regulators are placing increasing emphasis on the management of conduct risk within financial services firms. Central to this is the right management information (MI). The importance of MI is also set to increase in the UK under the Senior Managers Regime (SMR) and Senior Insurance Managers Regime (SIMR), where strong conduct risk MI will help Senior Managers to demonstrate that they have taken reasonable steps to understand conduct risks and that they have put in place appropriate controls.
This is the final part of a four-part blog series on the FCA’s Coverholder and TPA thematic review (often referred to by the FCA as its “distribution chain” thematic review).
Firms are achieving workable conduct solutions for delegated authorities in a number of ways, whether it’s by updating existing controls to add a conduct lens; increasing the evidence and documentation around existing practices; or by designing new aspects of control and oversight.
Automation will change the character of London businesses | How will Financial Services adapt to the new environment?
Since the Industrial Revolution, technological advances have transformed business and commerce, and changed the character of jobs that people do. With the rapid progress of digitisation, a further period of major transformation is under way. London, its Financial Services industry included, will inevitably feel the change and will need to respond.
There has been a fundamental shift in regulatory expectation and good market practice for delegated authority control and oversight frameworks.
This shift may increase cost in key control functions reinforcing the importance of a robust conduct risk assessment (as discussed in our previous blog) to achieve a proportionate and risk-based control and oversight framework. The risk assessment shows you the higher gross risk areas of your business and why they are high risk, enabling you to direct your resource – whether it be delegated underwriting management, compliance, claims or underwriting resource - so that you get more bang for your buck.
This is the second of a four-part blog series on the FCA’s Coverholder and TPA thematic review (often referred to by the FCA as its “distribution chain” thematic review)
The diversity and complexity of Coverholder and TPA populations is a challenge when mitigating conduct risk. A risk-based and proportionate solution is fundamental, so starting with a conduct risk assessment is sensible to provide structure and identify the different exposures to conduct risk.
As we near the outcome of the Financial Conduct Authority’s Coverholder thematic review, general insurance firms across the Lloyd’s and London market should consider how they stack up against regulatory expectations and current good market practice. Over the next month, we will be producing a series of short blogs covering some of the key elements of delegated authority control and oversight that we see the market currently designing and implementing:
Blog 1: Conduct risk assessments
Blog 2: Due diligence, audits and Management Information (MI)
Blog 3: Key market solutions and commercial challenges
The PRA and FCA have published a joint consultation paper (CP) on a series of measures to formalise whistleblowing procedures in firms. The aim is to encourage employees to raise concerns and protect whistleblowers from victimisation. This initiative responds to the Parliamentary Commission on Banking Standards’ recommendation to put in place effective mechanisms to allow employees to raise concerns internally.