Insurers urged to focus on business continuity plans

The Financial Conduct Authority has set out its expectations for insurance firms in the context of the current COVID-19 crisis and published guidance for consumers on the service levels they should receive.

In a statement to the industry, the FCA said: “We expect firms to consider very carefully the needs of their customers and show flexibility in their treatment of them. We are likely to see customers’ behaviours change because of the pandemic. For example, this could mean that customers may need to work from home or commute by car. We would not expect to see their ability to claim impacted by circumstances over which they have little control.”

It added: “We expect firms to clearly communicate any policy exclusions that may impact the cover and use of individual policies. This applies both to new sales or changes to existing policies (either mid-term or at renewal) – they must clearly meet consumers’ demands and needs.”

The FCA also emphasised its expectations for insurers own resilience throughout the COVID-19 crisis. It says that it is essential that all general insurance firms have plans in place to manage and mitigate the operational impact of coronavirus. More generally, it expects firms to have sufficiently robust systems and controls to continue to operate effectively in a stressed situation with business continuity plans to manage this, and have a Senior Manager responsible for business continuity and for managing the impact of coronavirus.

Firms should consider, along with other challenges, the impact of staff absences and the need to ensure staff wellbeing on continuity of service. They should also identify how staff absence or inability to use business premises can be sufficiently mitigated to ensure critical services are provided to customers. Where firms identify gaps through their planning that will, or could, cause harm to customers, they should notify the FCA through their usual supervisory contact.

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