Prioritising Vulnerable Customers

Vulnerable customers remains a key theme for the FCA – it is something that gets over 20 references in the regulator’s Business Plan for the forthcoming 12 months. The FCA’s next steps will prompt firms to consider further how they put into practice their commitment to the fair treatment of vulnerable customers across the whole customer journey.  So how should insurers be addressing that regulatory challenge – and, more importantly, what does prioritising their vulnerable customers mean for an insurer?

The business of insurance is to provide peace of mind and solutions when we are often at our most vulnerable.  Whether that is dealing with the consequences of an accident, theft or flood, or trying to find our way through the complex and nerve wracking world of funding our old age, most customers face insurers in need. 

Of course for some that potential vulnerability may be enhanced by health concerns, disability, frailty or perhaps challenges in communication.  Insurers recognise that those additional needs must be catered for. That of course has its own challenges.  Typically we under-report disabilities and few of us would wish to be labelled by a faceless financial service business.  Recording vulnerability gives rise to privacy concerns, and real challenges in keeping the information up to date, appropriately accessible and relevant.  But the customer that needs their renewal notice in large print doesn’t expect to have to ask every year, for every different policy they have with the insurer.

All this raises new challenges in today’s multi-channel digital businesses.  Certainly customer expectations have been enhanced by the personalisation journey that new tech is taking us all on.  Whilst technology brings new problems it also brings exciting new opportunities.  For example, using speech analytics and AI to help managers identify and focus on higher risk customer interactions.  Working with technologists and experts from the third sector can help firms think about new ways of making their services truly accessible to all.

Of course there is also a need for more fundamental new thinking about product and process design.  For insurers, recognising that many customers will understandably feel disadvantaged, and that many will be vulnerable in certain common interactions with the industry, is key to building a business that prioritises the fair treatment of vulnerable customers.  The FCA is taking that logic across the industry: is your firm doing enough to help ordinary customers navigate the ‘pensions maze’ and has it taken vulnerability into account in thinking about its pricing policy and new product development?

To meet these challenges, we at Promontory believe that to be successful firms must integrate consideration of vulnerability into all aspects of the customer journey and business strategy.  Ownership and tone from the top is crucial, but to ensure success the treatment of vulnerable customers needs to be a business-wide conversation.