Better consumer information on the way

Whatever the final outcome of the Insurance Distribution Directive (IDD), end-users will be better informed on the insurance products they are buying.

Consultation may yet modify the FCA’s suggestions but the broad concepts will remain and apply from pre-purchase to after the end of the contract:

• know your customer
• know your target market
• facilitate product comparisons and avoid competitive distortions
• provide Insurance Product Information Document (IPID)
• protect customer’s money
• no conflicts of interest

Achieving all these objectives requires a holistic approach within the organisation and then again when the product is retailed, bundled or distributed. Point of sale is of course the most crucial aspect but IDD will impact on product design, sales, HR, data security and many other areas.

The consumer must first be presented with a clear choice that meets their needs and, second, be provided with something that lives up to their expectations.

The new IPID must be in a durable medium, such as on paper, and contain objective details of the product and exclusions. It must be available for renewals and bundled packages where more than one IPID may be needed. Though brief in content, it must give sufficient helpful information to inform the customer’s choice prior to them concluding the contract. It will be up to the retailer to decide the point at which the information is most appropriate to aid that choice. 

Get it wrong and it will of course count against you in ombudsman decisions.