Changes in how the public go about their lives because of the coronavirus pandemic must not make it harder for them to make insurance claims, the financial regulator has warned insurers.
The Financial Conduct Authority (FCA) has urged firms to treat customers fairly and be transparent during the outbreak, noting that many consumers will be left in a vulnerable position.
“Customer behaviour is changing. We expect insurance firms to recognise this and treat their customers fairly, recognising the circumstances customers may find themselves in,” said FCA interim chief executive Christopher Woolard.
“We would not expect to see a customer’s ability to claim affected by circumstances over which they have little control,” he added.
The watchdog today set out what it expects from general insurance firms during the pandemic, including “having sufficiently robust systems and controls to continue to operate effectively in a stressed situation with business continuity plans to manage this”.
The FCA also called on insurers to have a senior manager responsible for managing the impact of the outbreak and ensuring business continuity.
It also said it expects firms to “act fairly, honestly and professionally in accordance with the best interests of customers”, and to “ensure that all customer communications are clear, fair and not misleading”.
“We have already seen some firms make significant efforts in difficult operating conditions. We expect all firms to be clear and not misleading whenever they communicate and be fair and professional in how they deal with their customers,” said Woolard.
The FCA’s update comes as it emerged that Lloyds of London is set to close its underwriting room later today due to the Covid-19 outbreak.
The insurance market held a trial shutdown last Friday to test its contingency systems, and chief executive John Neal said the test of its emergency trading protocols had been successful and “should provide confidence in our collective ability to trade electronically”.