The Financial Conduct Authority (FCA) has today announced that it will pilot the publication of general insurance ‘scorecards' on a number of products.
The changes aim to demonstrate how often consumers are likely to claim on a product, how likely those claims are to be accepted and the average claims pay-out.
An FCA spokesperson told COVER that while private medical insurance, dental insurance and cashplans are classed as GI products, they may not be included in the initial pilots, as only a small number of products will be tested.
The spokesperson also confirmed that protection products will not be included in the scorecard system.
The FCA will collect data from firms and publish this on its website to enable consumers and other interested parties to compare both products and firms.
Christopher Woolard, director of strategy and competition at the FCA, said:"We believe that publishing a range of information will help to boost competition between firms, encouraging them to focus on improving the value and performance of their products, whilst giving stakeholders and consumers more insight into the value they offer."
The results of the pilot will be used to inform any consultation on the use of such measures, the FCA said.
In July 2014, the FCA published the results of the general insurance add-ons market study which showed that competition was not working well for many consumers.
In June 2015, the regulator proposed a number of options for publishing product information, including claims ratio as a stand-alone value measure, claims ratio plus claims acceptance rates, and claims acceptance rates, claims frequencies and average claims pay-outs (the scorecard).
The pilot will last for around 12 months and include two publications of the data - one at the start and one at the end of the pilot.
The pilot will launch in summer 2016. The FCA will continue to engage with stakeholders around the pilot design ahead of the launch.
ABI director of general insurance policy, James Dalton said: "The ABI already publishes industry wide claims success rates for key general insurance products and the measures proposed by the FCA today were similar to those recommended by the ABI.
"We will examine this proposal in detail and work with the FCA going forward. In doing so we must ensure the high level of competition in the market continues, and that publishing this firm specific data does not risk misleading consumers with irrelevant information.
"It's important that buying insurance is not just about getting the cheapest price in the quickest time possible, but about ensuring people have the right product for their circumstances."
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