2023 was another challenging year with a number of challenges testing the resilience of companies across the insurance value chain.
One of the biggest challenges has been claims inflation, which has been on the rise for several years now and arguably came to a head last year amidst a mix of global economic and geopolitical crises.
The good news is that many industry commentators expect the rate of claims inflation to slow over the coming months.
Meanwhile the price increases seen across many business lines will soon start to feed through to insurers’ bottom lines, helping to ease the pressure on profitability that has persisted in recent years.
One thing that is not letting up anytime soon, however, is the level of regulatory oversight from the FCA.
The regulator has introduced a swathe of new regulations for the industry to grapple with, most notably the likes of Consumer Duty and Fair Value assessments.
These had the admirable intention of improving outcomes for consumers, but as panellists on our recent CX webinar discussed, they are yet to have the desired effect.
Insurers should expect the FCA to become more interventionalist over the course of 2024 as it looks to clamp down on bad performers and the undesirable characteristics it has identified in the analysis it has already carried out.
The recent Dear CEO letters sent out by the FCA’s Matt Brewis about GAP insurance is a clear indication of things to come, and those insurers performing at the wrong end of the market could soon find further action awaiting them.
This is one of the reasons why we now track the FCA’s Value Measures data, providing our subscribers with even greater levels of insight on how the market – and their competitors – are performing.
We firmly believe that understanding such measures will be an integral part of the success story for many insurers in 2024, giving them the knowledge needed to highlight areas of concern and make the necessary changes needed to plot a successful path forward.
