What does the FCA expect of insurers during the Covid-19 pandemic?

Mar 20th '20

These are unchartered waters for everyone, businesses and individuals.


Yesterday (19 March), the Financial Conduct Authority (FCA) set out its expectations for general insurance firms during the pandemic. It also provided information for consumers about what they should see from their insurance provider.


What has the FCA said?


The regulator has provided information on a number of topics, including:


  • Travel
  • Motor
  • Home, and
  • Private medical insurance


It has also provided clarification in relation to the suspension of products and policy renewals.


Christopher Woolard, interim Chief Executive of the FCA said:


‘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.


‘Customer behaviour is changing. We expect insurance firms to recognise this and treat their customers fairly, recognising the circumstances customers may find themselves in. We would not expect to see a customer’s ability to claim affected by circumstances over which they have little control.


‘Any customer concerned about their insurance should consider contacting their provider with any questions they may have.’


Expectations of firms

Setting out its expectations of firms, the regulator said that:


Many consumers are currently in a vulnerable position because of the coronavirus (Covid-19) pandemic. We expect insurers, given the unprecedented impact of coronavirus​​​​​, to be aware of the circumstances that their customers find themselves in.’


Firms are expected to:


  • Consider very carefully the needs of their customers and show flexibility in their treatment of them – as customer behaviour is likely to change; for instance, with people working from home rather than commuting. The regulator ‘would not expect to see their ability to claim impacted by circumstances over which they have little control’.
  • Clearly communicate any policy exclusions that may impact the cover and use of individual policies – whether for new sales or changes to existing policies.
  • Have operational resilience and business continuity plans in place to manage and mitigate the operational impact of coronavirus. Generally, in terms of resilience, the FCA confirmed that it would expect firms to:
    • Have sufficiently robust systems and controls to continue to operate effectively in a stressed situation with business continuity plans to manage this.
    • Have a Senior Manager responsible for business continuity and for managing the impact of coronavirus.
    • Act fairly, honestly and professionally in accordance with the best interests of customers.
    • Ensure that all customer communications are clear, fair and not misleading.


Firms should consider the way that staff absences and the need to ensure staff wellbeing may impact continuity of service. They should identify how they can mitigate staff absence or inability to use business premises to ensure critical services are provided to customers.


If firms identify any gaps through their planning that will, or could, cause harm to customers, they should notify the FCA through their usual supervisory contact.


Specific guidance for travel, motor, home and private medical insurers

In its detailed guidance, the FCA sets out expected actions for firms providing travel, motor and home, and private medical insurance. You can read the full expectations here. The specifics are obviously different for each area of the industry, but the themes are the same:


  • Firms must treat customers fairly
  • There must be clear communication to customers, for example around any policy exclusions that arise from coronavirus.
  • Individual circumstances need to be taken into account when making decisions.


Product suspension, renewals and mid-term adjustments

Firms may want to suspend some product offerings. Although the regulator is cognisant of insurers’ desire to manage their exposure to risks, it has ‘clear expectations’ of how firms deliver these changes.


Again, these are set out in detail on the FCA’s website.


If firms are considering making changes to their existing policies at renewal, they ‘need to consider the existing requirements for product design’. Firms should follow the appropriate processes in making any changes – including taking into account individual customer circumstances, especially around vulnerability. Messaging needs to be fair, clear and not misleading.


The regulator is also aware that some firms may wish to make mid-term adjustments to existing policies, putting policyholders on notice of the change. It sets out expectations of firms if they intend to vary their contract terms.


Expectations of brokers

The FCA points out that brokers have a ‘key role’ to play in uncertain times, ‘to help consumers understand the market, the impact of coronavirus and search the market for products that meet their demands and needs’.


Read more


  • The FCA’s full information about expectations of insurance firms can be found here.
  • Its advice to consumers can be read here.
  • The FCA has a full website on the coronavirus and its impacts, here.


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