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Consumer Duty: What duty do life insurers have to their customers?

May 22, 2024

In this episode, Jenelle Cherrie is joined by Donna Cowell and Jonathan Richards to discuss the implementation of Consumer Duty and the duty that insurers’ have to their customers.
Insurance Consulting and Technology

In this episode of (Re)thinking Insurance, Jenelle Cherrie is joined by Donna Cowell and Jonathan Richards to discuss the implementation of Consumer Duty and the obligations that insurance companies have to ensure good customer outcomes.

They explore the changes they have seen in the market so far, some of the challenges insurers are facing complying with the Duty as well as the benefits that instilling a customer centric culture can bring to organizations.

Regardless of where you’re still listening from, the insurers’ duty to customers is here to stay and I personally think it is a good thing for consumers and insurers alike.”

Donna Cowell | Director, Insurance Consulting and Technology
AI regulation; how will this impact insurers now and in the future?


(Re)Thinking Insurance Podcast Season 4, Episode 7: Consumer Duty — What duty do insurers have to their customers?

DONNA COWELL: The insurers duty to customers is here to stay. And I personally think it's a good thing for consumers and insurers alike. Providers and distributors must ensure that customers understand what they've bought or what they're going to buy. And I think that increased consumer understanding is very likely to lead to better customer engagement and satisfaction levels in our industry.

ANNOUNCER: You're listening to (Re)thinking Insurance, a podcast series from WTW, where we discuss the issues facing P&C, life, and composite insurers around the globe, as well as exploring the latest tools, techniques, and innovations that will help you rethink insurance.

JENELLE CHERRIE: Hello, and welcome to (Re)thinking Insurance. I'm your host, Jenelle Cherrie. And today, we're talking about the insurer's duty to customers with reference to the implementation of the Consumer Duty. I'm absolutely delighted to be joined by my guests, Donna Cowell and Jonathan Richards from our UK&I Life Team and our Insurance Consulting and Technology Business. Welcome, both, and thanks for joining me.

DONNA COWELL: Thanks, Jenelle. It's great to be here.


JENELLE CHERRIE: I'd like to start by asking you each to just introduce yourselves briefly and describe your background in this topic. And given the topic of the day and the core principle of the Consumer Duty is ensuring good customer outcomes, can you each give us an example of a firm delivering a good customer outcome for you? Donna, would you like to go first?

DONNA COWELL: Sure. Thanks, Jenelle. Hello, everyone.

I'm Donna Cowell, and I specialize in protection. And at WTW, I've been helping UK insurers and reinsurers on a wide variety of projects since I joined the organization last year. Some of these have been Consumer Duty-specific and other things, like pricing, demographic basis setting, market insight, propensity modeling, customer analytics and projects must consider the Duty that an insurer has to their customer. I've spent over 20 years in insurance and banking. And immediately prior to moving to WTW, I was head of Life and Health Pricing across EMEA for Swiss Re insurance division. I've also worked at other insurers and in banking in a variety of roles, like sales, reporting, existing customer management, strategy and pricing. And again, these are all functions that are affected by the Consumer Duty.

And I really like your question around outcomes. The one that comes to mind immediately is that I've been really impressed by the Finnish mobile phone network. I appreciate this is a little bit obscure, but I recently spent a week in the Finnish arctic, which is gorgeous and would definitely recommend that to our listeners.

And we had mobile phone reception everywhere. So we were miles from any towns or villages, opportunity mountains, and minus 35 degrees Celsius weather, and we had full signal everywhere. And this was a real contrast to my own personal UK experience of mobile phone signal, where I don't always get reception in my own house.

So I think they just made a really great investment in the proposition, and they're delivering a really fantastic product. And that enabled me to video call my family to show them the northern lights dancing, and that was a pretty special customer outcome for me. Over to Jonathan.

JONATHAN RICHARDS: Thank you very much. Hi, yes, I'm Jonathan Richards. I'm a Senior Consultant at WTW, and I, too, work within the protection segment.

My background is actually in propositions and product development, and I previously worked in the proposition innovation team at Zurich UK. And I've been involved with all things consumer duty since I joined back in 2022. Yeah, so that's me.

In terms of my example, I'd go with, recently, I went for a skiing lesson at one of those indoor ski places, which was quite fun. But the, the proposition itself was quite smooth, frictionless, self-serve. And I was quite impressed with that whole thing up until the ski lesson itself, where the ski instructor did very well in tutoring us all on a one-to-one basis, which was with quite a large group, which was necessary, seeing as I think most members of this lesson had maybe over-egged their competency at skiing, including myself.

So it was really important that they did that, and I was just impressed with the whole thing. So yeah, that's my example.

JENELLE CHERRIE: I love that you both have examples to do something with the cold and the snow-- I mean, assuming that you were at one of those indoor places that does the fake snow, Jonathan. So maybe there's something there, hey? Maybe there's something we need to look into about good customer outcomes and the impact of the cold.

OK, I also love that I think both your backgrounds spanned so many facets of the customer journey that this should be a really good discussion. So if we're both ready, let's get started. I'm going to start with a nice, easy question to kick things off. And if you don't mind, Donna, I'm going to direct this one to you. So for our listeners outside of the UK, what is the Consumer Duty?

DONNA COWELL: Thanks, Jenelle. Yeah, so many people in financial services in the UK will now be very familiar-- perhaps overly familiar with the Consumer Duty. But for those who are less close to it, maybe, or outside the UK, I'll give you a brief overview as it will flavor the rest of our conversation around an insurer's duty to customers.

So the Consumer Duty is a regulation that was introduced by the Financial Conduct Authority, and that's the UK's financial services conduct regulator, and it's intended to improve consumer protection for financial services firms in the UK. It covers banking, insurance, et cetera. The regulation applies to all firms conducting regulated activities that have a material influence over or determine retail customer outcomes. And that's an important aspect to note. It covers the whole distribution chain from product and service origination through to distribution and post-sale activities.

And the Duty consists of three key strands. First is the core principle, and you mentioned this in the intro, Jenelle. And this is that firms must act to deliver good outcomes for retail customers.

And that's the key strand that drives the rest of the regulation and how firms are implementing that. And it reflects the overall standard of behavior wanted from firms, and that is defined further by the other elements of the Consumer Duty. So there are three cross-cutting rules, and these are designed to provide greater clarity on expectations by explaining how firms should act.

They are that the firm must act in good faith, that it must avoid foreseeable harm, and that it must enable and support customers to reach their financial objectives. And these cross-cutting rules should help firms to interpret the four outcomes, which are a suite of rules and guidance setting more detailed expectations for a firm's conduct. And the areas covered by the outcomes are products and services, price and value, customer understanding, and consumer support.

And crucially, the FCA expects that firms can demonstrate at every stage of their business model how their actions and culture are focused on delivering those good customer outcomes that we mentioned. And I suppose you might say that the ideas within the Consumer Duty aren't new, and I would agree with that. The FCA and others have been advocating for these behaviors for a long time. What differs in this regulation is the emphasis. So the Consumer Duty places increased emphasis on firms putting the needs of their customers first and creates a really clear requirement that they have to do so.

JENELLE CHERRIE: Well, this all sounds really great and what a consumer would exactly want firms to be doing. But if it's only UK-based, why should our international listeners care about this at all?

DONNA COWELL: Yeah. Thanks, Jenelle. So if you are not in the UK, please don't log off. I think that all insurers globally have a duty to ensure that their customers have good outcomes.

So the Consumer Duty is the UK regulatory way of prescribing how that should be delivered, but the concept applies to insurers and firms working within the insurance industry globally. I think it's a principle that's really hard to argue against. Like you say, Jenelle, this sounds really good for customers, and I think that it is. And regulators across the globe have an eye on their neighbors.

And historically, we have seen conduct regulation trains that originated in the UK later popping up and appearing in Europe and beyond. So what's happening in the implementation of the Consumer Duty in the UK could very soon be finding its way into regulations or practices across the globe. And we've already seen greater consumer outcome and fair value focus already from many regulators across Europe, affecting several markets. So it's definitely an area of interest for others.

JENELLE CHERRIE: Well, that's really good to hear because I think we have seen movements in this direction in Italy and France, for example.

DONNA COWELL: Exactly, yeah, Yeah.

JONATHAN RICHARDS: And, Jenelle, I think I'll just add to that, that the types of changes that we are seeing and expect to see from the Duty, they're positive, and they're an opportunity for firms to shift towards greater customer-centric behavior, which really relates to all countries and speaks all languages, so to speak-- just to add on that.

JENELLE CHERRIE: Yeah, absolutely.


JENELLE CHERRIE: Well, OK. So I think, Donna, you've given a really good overview of what the Consumer Duty is. But what would you say the regulation is aiming to achieve? And how is it actually different to lots of other regulations?

DONNA COWELL: Yeah, so I guess there have been many previous iterations of conduct regulations, so this isn't new in the UK. So we've had Treating Customers Fairly, TCF. We've had Value for Members, applying to pension schemes, we've had the General Insurance Pricing Practices on restricting existing policy pricing and automatic renewals in the general insurance space-- so definitely not a new area for the FCA to be focusing on. But I think, despite the myriad of these other regulations, the FCA still had genuine, justified concerns for customer outcomes, and they saw practices by some firms that cause harm.

So I can give you a couple of examples. There was an investigation into equity release marketing information. And in 2023, the FCA found that there had been many inaccurate and misleading promotions that weren't giving customers a balanced description of the risks that they faced for those products. So as a result of that, almost 400 financial promotions had to be removed or amended.

And another example, this time, in the general insurance space where customers were not always receiving fair value from insurance products. So the Guaranteed Asset Protection product, or GAP business, which is often sold as an add-on to motor insurance and covers the difference between a car's purchase price and its current market value-- the FCA found in this product line, there were some cases where only 6% of premiums were being returned to customers in claims, and 70% of that customer's premium was going to fund distributed commission.

So I think these examples show why the FCA was concerned and why they were justified in being concerned that financial services don't always work well for consumers and that firms needed a fundamental mindset shift. So I think the previous regulations might have paved the way for the Consumer Duty, but this new regulation is a major change. So the Consumer Duty is principles-based, whereas some of the older regulations, like fraud and TCF, are more rules-based.

And I think principles-based means that the firm has to be much more proactive. They're expected to focus on the outcome achieved rather than just the steps that they've taken to deliver it, regardless of end product. And that makes it hard to avoid the responsibilities that come with the requirements because firms really have to define monitor and evidence the outcome.

So yeah, I think it's fair to say this is a significant piece of regulation. And I think it will have a substantial impact on our industry. I'm not the only one who thinks that. So the media has described this as the biggest overhaul for the UK's financial services industry in 20 years.

JENELLE CHERRIE: 20 years? So this is going to be a big one. So I guess the key thing I'm getting here is that there's going to be a stronger guide on the standards and evidence that will need to be shown to show adherence to these better outcomes for customers. OK. So how do you think the implementation is going so far? What are the FCA thoughts on this?

JONATHAN RICHARDS: Yeah, that is an interesting question. The FCA have been consistently communicating their own observations since the beginning of the implementation of the Duty based on their own review of firms implementation plans and fair value frameworks. And one publication was released as recently as this week that actually sets out their view of what they think good practice is in some areas and maybe where the room for improvement is.

And so overall, the sense is that there's been signs of really good progress actually across each of the outcome areas. And they've called out some examples, such as there's been evidence where firms are really altering their purpose, and their culture, and their mission to really instil some of these ways of approaching customer outcomes. And also, there's been examples of clear responsibility within the firms as to who is responsible for delivering these different customer outcomes.

However, there are some clear concerns that definitely remain around the robustness of some of these plans that firms have in place, as well as the strength of some assessment and monitoring processes, including that of vulnerability and vulnerable customers. And there's also, I think, a sense that the upcoming enforced deadline this year spells maybe more issues than perhaps the new business deadline of last year, and that's due to the associated complexity of that type of business. And throughout all of these observations, the FCA have really been consistent with the messaging and reaffirming the expectation for firms is to keep customers at the center of their business. It's something that they're continuing to push, which I think says a lot.

We feel, from what we've seen, that firms' responses certainly are not terrible, but there is definitely room for improvement. We think that there's a sense that firms are-- some firms, anyway-- are being quite quiet, maybe, claiming maybe to be OK based on existing practices and existing processes that they had in place before, which is something actually the FCA have explicitly called out as something they do not want to see. They don't want firms to be waiting for them to come knocking, so to speak.

DONNA COWELL: Yeah, I agree. So if you remember, the deadline for compliance for portfolios that are open to new business was July last year, and the deadline for closed books or legacy business is July this year. And partially, that reflects the FCA's understanding that those books of business are-- it's going to be harder to deliver the Consumer Duty there because of various legacy considerations. And if it's harder to do, then it's more likely to be areas of concern.

And Jonathan mentioned the FCA published just this week, and I can quote from that. They've identified there is still much room for improvement. And I think that mirrors what we've seen here as well-- so lots of firms trying really hard here, but there are definitely gaps and areas where there is more to be done. And I think it's important to recognize that and that the FCA have made no secret of the fact that they can and they will take action and sanction firms for not delivering good customer outcomes. And I think we'll probably soon start to see some examples of the regulator using their teeth in this space.

JENELLE CHERRIE: And then it really ties in with that theme that you said about encouraging firms to be proactive in this area, doesn't it? You mean, it really isn't enough to just to do nothing or to remain quiet. And given the broad coverage of the regulation, it's not surprising that there's a lot of work needed to ensure and, I guess, justify compliance.

DONNA COWELL: Yeah, exactly. It's not easy.

JENELLE CHERRIE: So I'm hearing that some firms have remained quiet, and there's room for improvement. But what changes have we seen in the market so far?

JONATHAN RICHARDS: Yes, it gives some examples on that, I think, really, we've seen a step up in firms looking into their MI capabilities. I think that's been one real point to pull out here. I think it's very difficult to claim a customer's outcome is good without being able to evidence with the right data, without having something to really point towards to prove that. And I think for many, these capabilities require that next-level-down view as opposed to what they maybe had already. And it's a case of not being comfortable with what you've got and making do with that. It's, can we get drill down? Can we be more granular? And can we split this out a little bit further?

But importantly, it's not just the data itself. It's then what you're doing with it. So have they got the right monitoring processes in place? Have they got the appropriate assessment and reporting coming out the back of it? Which I think has been a key development area for many. I don't think anyone has been able to avoid that at all.

And naturally, there's been an increase in board-level interest and concern. That's to be expected, but specifically in what firms are doing to keep themselves safe. And how are they summarizing their position against the Duty to the board, which in itself brings quite a few challenges. It's something that we've actually been supporting firms with, both with the structure of that reporting and how you take all that information and summarize it in the right way, but also, by providing insight directly to boards to provide that market view of what others are doing and that benchmarking type exercise.

And I think this topic itself is becoming increasingly urgent with the upcoming deadline for annual board reports this year given the new business deadline of last year. So that's a pertinent area, I think. But then, to see some real changes enacted, I think we've seen fees and charges being restructured and reshuffled as a result of the Duty last year, which was quite a tangible example.

And we're also seeing in the product development process, these are being altered to better align with the duties principles. And we've seen examples of certain product features being dropped or amended actually directly in the light of the duty, which, personally, I think is a really real positive outcome. And lastly on this, I'd say one big change has been the increase in protection conversations from advisors to their clients as a result of the Duty itself.

DONNA COWELL: Yeah, just to chime in there, Jonathan-- so again, I agree there's some been some really big visible changes. So we've seen changes in fee structures and the impact that that's had on firms' business models. The FCA quote that 37% of advice firms have already reviewed or changed their fee structure-- so very public, visible changes. But also, lots of stuff is happening behind the scenes less visibly in the market, perhaps.

So we've been supporting firms to tackle those harder questions, the areas that require more judgment-- so in things like helping determine value metrics, and thresholds, and building granularity into value for money assessments, leading to improvements in pricing philosophies, which flow through to premium alterations. So definitely lots of change, some of which is really visible to the market and some of which is wrapped up in firms' BAU processes, which is I think how it should be. The Consumer Duty is very much not a one-and-done exercise. It's continuous improvement to the way that firms operate-- and so building those improvements in across so many aspects, from customer literature to pricing to proposition design, et cetera.

JENELLE CHERRIE: It's really heartening to hear that there have been positive changes coming through. The increase in protection conversations between advisors and clients. Jonathan-- that can only be seen as a positive, right?

JONATHAN RICHARDS: Yeah, absolutely. I mean, just one example, I think, of what's driving a lot of that-- I think the Duty has meant that mortgage advisors now have the obligation to ensure their customers, their clients, can service their mortgage debt in case of emergency, which means, I think, ultimately to a more holistic conversations that they're having with their clients, which involves the protection compensation, and protection products, and what kind of solutions they can provide, I think.

JENELLE CHERRIE: Thanks. Brilliant. Donna, what would you say are the key challenges for insurers in complying with the Duty?

DONNA COWELL: Yeah, so it's definitely not easy. And I've spent a lot of my career in pricing, and I think the fair value area is definitely one where firms are finding implementation challenging. And the FCA doesn't and won't set prices, so they're not going to tell you what your limits of reasonableness are or how to assess that. They're requiring considerable thought from the firm. And companies need to consider how they're going to define that fairness, how they're going to measure it, how they're going to monitor it and feed in many aspects to create that broad view of what value and fairness means to them.

And I've seen examples where firms need to invest in improving the granularity of their assessments and creating different metrics and measurements. And it's definitely not enough to compare your aggregate pricing to the market and conclude that it's probably fine. This is requiring substantial investment in design, but then also in production and that regular measurement and monitoring of those kind of value metrics.

Another point, the FCA gave explicit feedback on actually last year that some firms have found lacking in collecting and monitoring evidence that products and services represent fair value. So there's not always sufficient analysis of the distribution of outcomes across groups of customers in their target market-- a reliance on broad averages, rather than granular enough assessment.

Much of the UK insurance market is highly commoditized, and I think certain products are very price-competitive. And in the past, firms might have balanced losses or low profits on one part of their portfolio with higher prices and better returns on others, often expecting poor customer value, or poorer customer value, for those ancillary rider products or at certain age or coverage levels. And the Consumer Duty makes that very, very hard to justify.

But price doesn't equal value, and firms can use insight to differentiate and add elements to their propositions that their customers really value to help them sustain their margins. So yeah, price and value, definitely an area that we've been able to help firms understand their obligations and assess more broadly how they can make themselves and their boards comfortable, that they are assessing, monitoring, and delivering good customer outcomes in that value space.

I guess another thing, particularly around the closed books-- so the closed-book implementation deadline is end of July this year. And the FCA recognized the additional challenges of legacy books, which is why they allowed for that extra year for implementation. And there are lots of harder aspects for legacy business.

You've got missing or incomplete customer data. Things might have been on paper record, status lost when business is transferred to other firms. There may be more gone away customers without accurate contact details, et cetera.

And legacy products-- they were designed in a different period both economically, demographically. And in terms of customers' expectations of service and product features, very different world to that where we're working in now. So firms must ensure that all of their products and services are delivering good customer outcomes regardless of when they were originally sold. But this really isn't easy. If you don't have all the data in the best format to inform that assessment.

And I guess finally, another area of interest from the FCA, and obviously for firms as well, will be around the board reports. So how do they instill that huge amount of granular information that they need to do to assess their performance against Consumer Duty and customer outcomes into relevant, appropriate summaries that capture enough detail for the board to be appropriately informed of risks and actions, but in a reasonable volume of information so as not to overwhelm the capacity and obviously highlight those key areas that need to be addressed or need to be focused on.

JONATHAN RICHARDS: Yeah, Donna, I agree. As well as that, I just want to add that as the duty is outcomes-based and was principles and outcomes-based, its application can actually be quite unclear in certain contexts, especially when it spans so far and so deep, I think. How do firms know what the right thing to do is at every turn? And what reassurance do they have to work from? What can they bounce their own approach against to make sure that they are comfortable, that they're not completely underplaying or overplaying their response to this? So it can be really difficult in some areas.

JENELLE CHERRIE: But why don't firms do more of this granular assessment that you've talked about, Donna? I mean, it sounds like it'd be really useful to know in that product design and development journey.

DONNA COWELL: We'd all love to have the answer to every question at our fingertips, right? And some firms have an easier job of that than others, depending on the products that they sell, and the history, and the IT systems that they're using. But I think firms don't necessarily gather, manage, and share the information internally in a way that allows them always to have the insights that might be useful to support this and other business objectives. So definitely, investment in data and data analytics and information within the organizations, I think, is really helpful for achieving Consumer Duty objectives and obviously much wider commercial objectives as well.

JENELLE CHERRIE: That makes sense. That makes sense. I suppose, it's so broad, isn't it, that it'll be, as Jonathan said, how do you know what's right? How do you know what's best? What do you put into place?

So despite these challenges that you guys have just brought to the fore here, what examples have you seen of good compliance?

JONATHAN RICHARDS: It's a good question. I think, to give a couple of examples, I would firstly start with instilling that customer-centric culture that I touched upon earlier. I think it's a lot easier and a lot more natural when everyone at an organization can follow that clear purpose and pull in that same direction. I think it goes for a lot of things, not just this. And that can be done through a clear and well-communicated customer strategy.

But what this will do is give you a foundation not only to help from a Consumer Duty perspective, but also, it contributes towards offering great customer journeys and propositions for all of your customers and gives you that platform to build relationships that they really value and keep them engaging with you as a firm and all of that good stuff. So I think it's really-- when it's used as a platform for opportunity, I think that's one really good example of what good looks like in this space.

Other examples-- I think, from a product perspective, we've seen some recent changes. In the protection space specifically, we've seen changes earlier this last year that really break insurance products down and add that next level of personalization and choice. When barriers between these products are broken down and dissolved, and features and benefits can move from maybe where they're more traditionally found into other areas, I think that really reflects modern customers' lives, really. And I think that that's a really important thing for the industry to keep note of and continue to do.

And there's also examples of some products backdating their product definitions when they make improvements, which, again, is something quite forward-thinking and really positive. So the more of that, I think, the better. And it just lends itself completely to the duty.

And as I mentioned before, we've seen already changes to this development process itself being made and through a more product-customer fit type of analysis and an effort that really then leads to itself-- lends itself, sorry, to better customer outcomes, I think.

And then the last example I'll give, we've touched on before, is around the board reporting perspective. I think that we've seen some reporting structures that are that are dynamic in order to cope with that massive information. They're not rigid. They can change, and they change to focus on what's important, what's basically not hunky dory, the stuff that's maybe tracking amber or red, and summarizes it well.

And that process that can summarize that well with clear actions when gaps are identified and clear tracking of those actions. I think it sounds so simple when it's said in a couple of sentences, but it's difficult to do. But when done well, I think it really puts a firm in a good position to make sure that they are traveling in the right direction, basically.

DONNA COWELL: Yeah the action plan is just crucial, right? So the Consumer Duty isn't one and done. There will be areas that firms want to improve on. But what the FCA wants to see is how they've identified those, what they're doing about it, the quality of that plan for improvements and corrections where they've highlighted them. And Jonathan mentioned some of the many proposition changes that we've seen that are no doubt influenced by the direction of the Consumer Duty.

And one that I particularly like is a firm that has added a backdating of improvements or critical illness-specific improvements so that their existing portfolio benefits from any improvement that they make for their new business. And I think that is a very customer-centric approach to proposition design. So like we said, some of the things are very visible in the market, and there's a lot going on behind the scenes here at WTW that we're privy to.

And we've seen a lot of firms actively invest in reviewing their current position-- so for proposition reviews, but product reviews, but also more broadly across performance, across all the four outcomes. And using best practice, maybe through benchmarking, as Jonathan mentioned, is one area of insight to identify their gaps and action plan to raise their standards. So there's a lot going on that firms are working really hard to deliver here, I think.

JENELLE CHERRIE: It's funny that this customer-centric culture seems really, really simple, and why wouldn't you do it? But in practice, I can see why it can get so complex and complicated to really embed because, I mean, you've touched on from product design to the customer journey to just even the reporting aspects at the end of it. But it does feel like it's the right direction to be going in, doesn't it?

JONATHAN RICHARDS: I think, absolutely.


JENELLE CHERRIE: All right. So what wider trends do you think will have an impact on how the Customer Duty embeds?

DONNA COWELL: Yeah, of course, so the Consumer Duty isn't existing in a vacuum. There's plenty of other things going on. And of the things I think is really interesting is AI and digitalization. I think that's a big one that will really aid the Customer Duty implementation.

So it's going to help firms to raise standards, I think. The pace of change here is quite incredible. And we're already working on ways to support the consumer duty implementation with advancing technology. So for example, firms can utilize AI models to identify characteristics of vulnerability, and that will help them to categorize and support vulnerable customers.

And they can use large language models and sentiment analysis to collate and review customer comments and views across calls they might make to the firm, emails they might send, or social media, and all the forms of communication. And they can use that to identify and rectify dissatisfaction. And naturally, AI has got to be in an environment with careful controls and ethical and anti-bias guardrails. But I think that's probably an area that will really help firms to achieve those good customer outcomes.

JONATHAN RICHARDS: And I'd just add from a product perspective, I think customer expectations are shifting. And they're shifting so far to be for propositions to be more on demand. The way in which they're accessing their products, I think, is changing. And what they're accessing, I think, they're expecting to be more and more personalized. I think that hyper-personalization trend is something that really needs to be focused on as they're continued to be built more around the customer with total flexibility to suit.

I think these changing expectations have a knock-on effect on the quality of outcome. I think it changes the goalposts almost. So firms will really need to keep up with that, keep tracking what is the customer's behavior, what kind of needs do they have, how are they serving those needs? They need to be on top of that, I think, to make sure that they continue to align with the Duty and deliver those good outcomes.

JENELLE CHERRIE: It sounds like a really good combination of the two. I mean, organizational cultural changes being more data-driven can really help firms support their customers here. But recently, the FCA has issued a consultation on the advice guidance boundary. Do you think it will be impacted by the Consumer Duty?

DONNA COWELL: Yeah, definitely. I think for this and all future regulations, the FCA have been really clear that anything must be implemented with the Consumer Duty principles front and center. And I think consumer protection remains at the core of a successful advice regime. And ensuring people have affordable access to appropriate decision support is really crucial to achieving good customer outcomes-- so very much interconnected. And the Consumer Duty will come out strongly in, I think, the final recommendations or requirements of that kind of future advice.

JENELLE CHERRIE: Yeah, that makes sense. So if you had to sum it up based on our discussion today, what would be the key takeaways for our listeners on this topic or one piece of advice you'd like our listeners to leave with? Donna, would you like to start?

DONNA COWELL: Yeah, sure. So I think, regardless of where you're listening from, the insurer's duty to customers is here to stay and I personally think it's a good thing for consumers and insurers alike.

Providers and distributors must ensure that customers understand what they've bought or what they're going to buy. And I think that increased consumer understanding is very likely to lead to better customer engagement and satisfaction levels in our industry. I think a piece of advice may be that given there's a lot of existing regulation and the fundamental concept or goal of the Consumer Duty isn't in itself new, many firms feel that they are already well on the way to compliance.

And some have only made cursory changes to their businesses. And I think then there's a real danger that firms haven't recognized the step change that's really needed to truly adhere to the Duty and deliver those good customer outcomes. And the FCA have made it clear that they won't tolerate that. So key piece of advice-- really invest in understanding your position against the requirements and justifying your position as well, I think.

JONATHAN RICHARDS: I completely agree with Donna, with what she said. I think what I'd go back to is just reminding everyone that this requires that cultural change. It requires that customer strategy and not in name only. It needs to be communicated. It needs to be fed through the organization an effective way really make sure that employees across the business believe and they and they understand the direction that they're all moving in.

And I think that things will flow so much more easily when that is done. And I think if it's not done well, then I think they're likely to keep hitting issues, keep hitting stumbling blocks when they do their deeper analysis across the business. So for me, it's easy to say, again, in a sentence, but I think that the firms definitely can achieve that, 100%.

JENELLE CHERRIE: Oh, thanks, both. It does feel like there's something that all firms could and should be doing. I mean, no firm is immune from this, and it certainly feels like an area where it's possible to be constantly looking to improve, evolve, and challenge themselves to do better.

DONNA COWELL: Absolutely.


JENELLE CHERRIE: Thank you, both, for your great summarizing words and pieces of advice. Donna and Jonathan, thank you so much for sharing your perspectives.


DONNA COWELL: Thanks for having us, Jenelle.

JENELLE CHERRIE: And to all of our listeners, thank you for joining us. If you enjoyed this episode, please make sure to subscribe, and we'll catch you again on the next episode of (Re)thinking Insurance. Goodbye for now.

ANNOUNCER: Thank you for joining us for this WTW podcast featuring the latest perspectives on the intersection of people, capital, and risk. For more information, visit the Insights section of This podcast is for general discussion and/or information only. It is not intended to be relied upon, and action based on or in connection with anything contained herein should not be taken without first obtaining specific advice from a suitably qualified professional.

Podcast host

Jenelle Cherrie
Associate Director, Insurance Consulting and Technology

Jenelle is an Associate Director in WTW’s Insurance Consulting and Technology business with over 10 years’ experience working for large global insurance and reinsurance companies. Jenelle has worked in a number of areas within the insurance industry, starting her career in valuations and reserving before moving on to pricing and product development. In particular, her specialist areas include Wealth Management product development and pricing, supporting the cultivation of commercial product strategies and protection pricing.

Podcast guests

Donna Cowell
Director, Insurance Consulting and Technology

Donna joined WTW in 2023 and is a Director in the Insurance Consulting and Technology business. Prior to this, she worked in and with large and small Insurers, Reinsurers, Protection Distributors and Banks. In particular, her specialist areas are Protection and Reinsurance where she works in areas such as strategy, pricing, organisational agility, proposition creation and process efficiency.

Jonathan Richards
Associae Director, Insurance Consulting and Technology

Jonathan is a Associate Director in WTW’s London office, having joined in 2022. Jonathan is responsible for driving an increased customer focus on UK protection propositions and has experience designing new products through a customer-led approach. He has over 5 years’ experience in the life protection industry with a strong understanding of protection product structures, distribution channels and different customer journeys.

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