FCA publishes multi-firm review on small mutual life insurers

The FCA has published findings from its multi-firm review on customer outcomes achieved by smaller mutual life insurers.

The key findings were as follows:

• Target Market Statements – Firms had a strong focus on understanding their customers, but most had broad target market descriptions statements, and some were also unclear on who their products would not be suitable for;
• Fair value assessments – Firms had strong metrics to measure value, but most were limited in their conclusions. They often relied on a single benefit – such as ease of purchase – rather than considering overall product quality and related services;
• Fair treatment of with-profit policyholders – Some firms had a strong understanding of outcomes for with-profits customers, but generally, firms did not have a clear justification for how their proposed new business strategy was COBS-compliant and that operating practices were fair to these policyholders;
• Financial operating models – All firms emphasised the importance of centring customer outcomes, but were inconsistent in assessing their future viability. Some assessments also did not support timely decision making on strategic direction.