Update from David Baker, Chief Risk Officer, AXA UK and Vicki Joshi, Chief Customer & Brand Officer, AXA UK
The Financial Conduct Authority, (FCA), published its policy and final guidance for the new Consumer Duty regulation last July, a year ahead of its introduction. However, AXA UK&I has been working to prepare for the higher consumer protections for some time.
In this initial update, we wanted to share a little about our preparations and to let you know what you can expect from us over the coming months.
As a group that already has the customer at the heart of its business strategy, AXA UK&I welcomes the new Consumer Duty and the increased focus on delivering good outcomes for the customer. We believe that this customer-centric approach will be good for all our businesses and that by working together ahead of its introduction, we can help each other to be ready for Consumer Duty.
The requirements
Consumer Duty requires that businesses take action to deliver ‘good outcomes for customers’ throughout the customer journey by understanding their needs, financial objectives and characteristics, including any vulnerabilities. This applies across the customer journey and specifically for the following four outcomes identified by the FCA:
- products and services
- price and value
- consumer understanding
- customer support
Businesses must also satisfy the ‘cross-cutting rules’ which require them to: act in good faith to deliver good outcomes, help customers to achieve their financial goals and to act to avoid ‘foreseeable harm’ to customers. All firms will also need to show evidence that they are delivering good outcomes for customers in these areas. More information about the new Consumer Duty regulations is available from the FCA.
Work is underway across our businesses
AXA UK&I has dedicated resources to ensure its readiness for Consumer Duty and has already made good progress in the four outcomes highlighted by the FCA:
- Products and services – regular product and service reviews will now consider suitability for the needs of all customers on an ongoing basis
- Price and value – fair value assessments made to assess whether good value is received by all customers including vulnerable customers
- Customer understanding – review of our communications and documentation through a customer lens to maximise clarity, accessibility and overall experience
- Customer support – review of FAQs, website content, claims and complaints processes plus service standards to assess appropriateness and accessibility for all customers.
Where we have found any shortfalls in customer experience, we are making changes and investing in training and solutions to resolve any issues.
Working together
As a valued partner, AXA is committed to working closely with you, all our broker partners and suppliers across the value chain to meet the July 2023 deadline. We believe that we can achieve a more seamless and superior customer experience by working in tandem to deliver the required good outcomes for all our customers.
With this goal in mind, we want to ensure you have sufficient time to provide any information we may need. We know that you’re also preparing for the new regulations, so if we do need any specific input from you, we’ll aim to contact you before the end of April with any requests.
In the meantime, please see our FAQs and the detailed information about Consumer Duty that’s available from the Financial Conduct Authority.
FAQs
We're already doing a lot to drive positive customer outcomes at AXA Health by keeping our customers central to our business.
We have reviewed our existing products and services to consider how well they meet our customers' needs. We've also considered whether they represent fair value for all customers, including the vulnerable.
We are working to meet the needs of our customers by investing in simplified, accessible, multi-channel communications, staff training and adapting processes and products based on customer insight. We're also developing new management reporting to evidence that we are delivering good outcome for customers.
Full details of the changes required are available in the FCA's final published guidance
We will continue to work with our brokers and suppliers to maintain existing commission arrangements. AXA Health do not anticipate any changes to commission levels because of the introduction of Consumer Duty. If this changes in the future, we will let you know as soon as possible.
We'll need your continued help to recognise vulnerable customers at point of sale and throughout their policy. This means identifying any customised support or reasonable adjustments the customer may need. Capturing these needs as soon as you identify them is key to delivering the seamless, customer centric experience we're aiming for.
More information on how to treat vulnerable customers has been published by the FCA (Financial Conduct Authority).
The Financial Conduct Authority is still consulting with the financial services industry on how to manage customers who are in financial difficulty. They published draft guidance in January on supporting customers in financial difficulty which we are using to review our current processes. The FCA's final guidance on supporting customers in financial difficulty is expected to be published in Q2 and introduced alongside Consumer Duty in July 2023.
We will continue to use our existing communication channels with all our broker partners and suppliers and where required we may publish additional information online.
The Financial Conduct Authority has published information on all aspects of the new Consumer Duty. The Consumer Duty final guidance was published in July 2022 and they have published other guidance on specific aspects of the Duty:
CP23/1: Insurance guidance for the support of customers in financial difficulty (fca.org.uk)
CP23/1: Insurance guidance for the support of customers in financial difficulty (fca.org.uk)