You will be aware that the FCA are looking closely at Product Switching as part of their overall review into Protection and they recently produced an update MS24/1.3 in which they noted the following, so it remains clearly on their “Radar”:

5.11 Rebroking is a practice where consumers may switch their insurance providers or policy following contact by an intermediary. Rebroking allows consumers to change the terms or coverage of their existing insurance policies to better align with their evolving needs. However, a policyholder switching to a different provider or policy is also likely (though not certain) to be higher risk due to their greater age, meaning rebroking could sometimes lead to poor outcomes.

7.5 We are also reviewing a range of industry practices that may affect consumer outcomes. This includes how premiums are set and vary across channels, including the use of loaded premiums; the structure and level of commission arrangements; the use of panels; and the overall value offered by different products and commission models. Furthermore, we are exploring the practice of rebroking and how often consumers switch policies or providers during the term of their initial policy, whether this is likely influenced by commission structures, and whether it consistently leads to better outcomes for consumers.

We all know that there are often genuine reasons for re-broking policies and as long as the Consumer is receiving a better overall outcome this is something that should not be discouraged.

However, with the ongoing complexity of Products it is increasingly difficult to decide which Policy is better for any given Customer at any given time, especially with the enhanced focus Insurers now have on Underwriting client conditions such as Mental Health.

It would seem sensible therefore to have a “Policy” in place within a Firm to look at cases carefully when a switch has occurred, either as part of the T&C scheme OR at least as part of the Consumer Duty Plan.

Recent evidence has shown that where underwriting is shown to be incorrect in post-sales reviews, policies have actually been cancelled by Insurers thereby leaving the Consumer unprotected – getting this part of the process correct is vital.

There are a number of Software systems to support advisers in comparing Products and we have now teamed up with Defaqto to offer you their CIC Compare Product.

It compares Products written by Insurers going back to 2009 (evidence shows that the vast majority of “live” policies on Insurer Books has been written post that date).

It uses actual Claims Data from Insurers as a base for it’s research and weights the ratings linked to actual Claim conditions giving it significant credibility.

You can look at a demonstration of how the Software works below.

We will be offering the Software itself Free of Charge within a Compliance Package, to ensure the best possible client outcomes are achieved for you. We will be supplying some compliance services alongside the provision of the software, including an audit to help you formulate your own switching “policy”.

There are two different options for accessing the Software:

Option 1 - Ad-hoc

Our experienced Paradigm Consulting Team will provide a remote audit looking at the compliance of a firm's switching process.

We will subsequently review and feedback on 3 replacement policy file reviews.

We will also provide up to 4 fully Defaqto CIC Compare licences giving 12 months access. Should you decide after this to consider Option 2 you will be able to continue with usage of the licences.

The cost will be £660+VAT as a one off payment, this is reduced if you already purchase Compliance from Paradigm to £560+VAT.

Option 2 - Contracted

Year 1

Our experienced Paradigm Consulting Team will provide a remote audit looking at the compliance of a firm's switching process.

We will subsequently review and feedback on 3 replacement policy file reviews.

We will also provide up to 4 fully Defaqto CIC Compare licences giving  3 Years access with an option to continue with licences after 3 years if the firm renews their compliance contract.

Year 2

Provide 12 replacement policy file reviews (equivalent of 2 file review days).

Year 3

Provide 12 replacement policy file reviews (equivalent of 2 file review days).

Price - £115+VAT (paid monthly across 3 years).

For further information please email [email protected], or contact your Business Development Director. Find your local Business Development Director here