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19 March 2024Consumer Duty: An Opportunity For Consumer-Centric Excellence


Consumer Duty: Regulatory Standard and Customer Experience
The landscape of the insurance sector in the United Kingdom is in a state of evolution. This article focuses on the profound impact of the Consumer Duty, exploring how insurers can align their operations to not only meet the Duty’s standards but to drive Customer Experience (CX) and the Customer Journey, examining strategies that can turn regulatory compliance into a catalyst for enhancing sales and fostering a mutually beneficial relationship between consumers and insurers.
Understanding the Consumer Duty
The Consumer Duty represents a monumental change, requiring firms to surpass the previous standards set by the FCA’s Principles for Business. It demands a higher standard of customer care, with a proactive commitment to delivering good outcomes for customers. While many insurers already aligned with these principles, the Duty necessitates a review of current approaches, even if it means reinforcing well-established processes.
Cross-Cutting Rules
To assist firms in navigating the Duty, the FCA has introduced cross-cutting rules, emphasising behavior expectations:
1. Act in Good Faith: Firms must engage in honest, fair, and open dealings with consumers, aligning with the provisions of the Duty without compromising their commercial interests.
2. Avoid Causing Foreseeable Harm: Firms should prevent harm, even in indirect relationships within distribution chains. However, if a firm reasonably believes a customer understands and accepts a risk, failure to prevent their proceeding may not breach the Duty.
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