FCA GENERAL INSURANCE PRICING PRACTICES – A MESSAGE TO BROKERS
Page last updated: 01/09/2022
The Financial Conduct Authority (FCA), in its Policy Statement (PS21/5) has introduced new rules on general insurance pricing practices. These came into effect on 1 October 2021 and 1 January 2022. As an FCA-authorised firm, you will be familiar with these requirements (in particular those affecting your sales processes and if you act as a price-setting intermediary). We explain here how Manchester Underwriting Management (MUM), as a product manufacturer or co-manufacturer, intends to fulfil the requirements on demonstrating product value.
MUM strongly supports any initiative designed to improve outcomes for policyholders. We have in place an established framework of periodic product assessments, using factual indicators to assess risk and value. On this page, we provide guidance and resources to help support those brokers selling our products. In particular, you will find Target Market Statements to help you understand the intended sales population; you will also find Fair Value Assessments so that you understand the work MUM has carried out to assess the value of our products.
Target Market Statements
We are required as product manufacturers and co-manufacturers to supply information about the intended target markets for MUM products. We have produced a series of Target Market Statements relating to our product groups, which can be found below.
Please note that our Target Market Statements are only intended to provide an indicative summary of the target market for a product, and are not summaries of coverage. They are not intended to be shared with policyholders. Please refer to the relevant policy documentation for full details of the coverage provided.
Fair Value Assessments
MUM completes Fair Value Assessments for products in our estate on a regular basis, to demonstrate that our products continue to offer value for money to the intended customers, that they perform as the policyholder expects, and that there are no risks of dilution of this value.
These assessments include consideration of product information such as:
- the nature of the product, coverage and exclusions
- the target market
- the way we price the product (including the remuneration paid to MUM and other distributors, in particular given the services provided)
- the potential value of the product over a reasonably foreseeable period, and any indicators that suggest the product may not be providing value to customers (including complaints, claims, and sales).
To see our Fair Value Assessments please click the links below:
Communication to our Distribution Network
We have written to our network of brokers, setting out our expectations around their sales and remuneration practices. A copy of the broker letter can be found here.
You will see as part of this communication that we have asked for information to help us complete our Fair Value Assessments. This information includes details of fees and charges made by brokers and any products sold alongside our own.
If you have any questions about our letter, the information requested by MUM, or any of the other materials on this page, please contact us using the following email address: info@manchesterunderwriting.com