In response to the Financial Conduct Authority’s (FCA) launch of its discussion on the impacts of big tech on financial services, Dr Matthew Connell, director of policy and public affairs at the Chartered Insurance Institute, noted: “We know that some big tech firms might consider themselves to be in a strong position to deliver insurance to consumers and SMEs in a convenient way, as we depend more and more on mobile technology for payments, checking our finances and purchases. We also know from the CII’s Public Trust Index that ‘ease of doing business’ is an important factor for consumers and SMEs when buying insurance.
“However, experience with comparison websites shows that competition can be skewed towards what is easy to comprehend, with quality of advice and cover losing out to price and convenience. This is despite the fact that both consumers and SMEs rate ‘confidence that the insurance will pay out’ as the most important factor, while SMEs rate protection – having cover that closely matches their needs – as the third most important factor.
“We feel that it is important that the FCA uses the introduction of its Consumer Duty to ensure that competition is driven by the factors that consumers and SMEs believe are most important – this is more often about reliability of cover than price.”