As Covid-19 continues to evolve in unprecedented ways, it is clear that protecting vulnerable customers will continue to be a key focus for the FCA. Widespread job losses, increased social isolation, housing insecurity and reduced access to mental health services have, according to the mental health charity Mind, led to an increase in mental health conditions such as depression and anxiety over the past 6 months. More people across the UK, from all different socio-economic backgrounds, are finding themselves increasingly vulnerable.
When the FCA published its first guidance consultation in July 2019, nobody could have expected that, in less than a year, the world would be in the midst of a global pandemic, with the UK potentially facing the worst economic crisis since the 2008 financial crash. Lockdown restrictions, social distancing and business closures throughout the UK since March have led to a surge in unemployment, with the Office for National Statistics placing the unemployment rate at 4.1% (May to July), with young people aged 16-24 worst affected (an increase of 76,000 compared to 2019). Furthermore, between March and August, the number of people claiming unemployment benefits rose by 120% to 2.7 million.
It is in this climate that the FCA’s second vulnerable customers consultation (GC20/3) was published in July 2020, to which the ABI responded. In GC20/3, the FCA acknowledged that it expects Coronavirus to have significantly increased the number and severity of issues affecting consumers (for example ill health, bereavement and job loss), particularly for those already showing characteristics of vulnerability. Furthermore, the FCA refers to the ‘newly vulnerable’ and highlights the particularly severe impact of the pandemic on certain groups, including women, low-paid workers (including those on part-time or insecure incomes), the self-employed, young people, students, private renters, families with dependent children, single parents, and people with health problems and disabilities.
The vulnerable customers final guidance is coming at a time when ‘vulnerability’ couldn’t be more relevant to both regulators and firms. That is why our Annual Conference 2021 Conduct breakout session will focus on vulnerable customers. The session, involving a panel discussion with regulators and key industry figures, will assess the needs of vulnerable customers and the key new issues that have come into sharper focus following the pandemic. The session will consider the potential impact of the FCA Guidance on vulnerable customers, how regulatory and consumer expectations on industry might have changed, and how insurers’ approach to vulnerability is evolving. We look forward to you joining us.
You can book tickets here.