FCA has published its first set of value measures data for a range of general insurance products, for H2 2021. It highlights:
- claims costs as a proportion of premium ranging from just over 5% for GAP insurance sold as an add on to nearly 66% for motorcycle cover;
- add ons sometimes having a lower claims cost proportionate to premiums than the corresponding standalone product;
- the lowest percentages were for all GAP products, add on excess protection and PA insurance and various travel policies
FCA says the figures will, from now on, be published annually, and firms will be able to use them to help assess the value of the products they offer. FCA notes that many considerations come into value measurement, and also acknowledges that products that comply with PROD 4 will be compliant with the expectations on firms under the Consumer Duty, but nevertheless studying the figures could help firms to anticipate wider issues.
The data tables, which firms can search, are based on product category (of which there are 32), claims frequency, claims acceptance rate, average payout, claim complaints as a percentage of claims, average number of policies in force and total retail premiums. There is also a facility to search by firm.