KPMG’s Andy Masters and Phil Smart discuss the findings of TR16/2: the Financial Conduct Authority’s (FCA) thematic review into the treatment of long-standing customers in the life insurance sector.
A paradigm shift out of reach
- The findings of TR16/2 confirm what KPMG have been predicting for some time - that life insurance companies with large closed books are unlikely to continue to meet FCA expectations without significant investment to update aspects of their business model and customer communications.
Embracing the future
- While a paradigm shift may be out of reach for life insurance companies, an increase in focus on customers and outcomes has to happen, and the FCA’s decision to investigate the six firms mentioned in the TR16/2 suggests a new direction of travel.
- Insurance companies that embrace new technology and innovation will find the short-term cost may well be outweighed by the long-term benefits of greater customer engagement and operational efficiency.