Exactly one year ago, I wrote my first article on this ‘blog.
In it, I explained why I had joined this firm.
I’m pleased to say that the decision has been completely justified by my experience of the intervening 12 months at a brokerage rightly regarded as one of the most dynamic and capable around.
My arrival at Broadway, though, coincided with one of the significant shake-ups in the insurance industry’s obligations to its customers in recent decades.
New rules in relation to Consumer Duty took effect a year after they were introduced by the Financial Conduct Authority (FCA).
They were intended to help all those individuals and organisations who buy insurance and other financial services, providing clarity about the vast array of products on offer so that they are able to make informed choices about which are right for them.
There was a particular emphasis on protecting vulnerable customers too.
As I said in August last year, the FCA’s oversight of nearly 45,000 businesses is “no small task”.
Whilst I made clear Broadway’s unequivocal position that compliance with robust procedures is both necessary and important in maintaining the trust of prospective policyholders, I did point out that it was “time-consuming” if done properly.
What neither I nor anyone else could have anticipated is the degree of strain which the Consumer Duty rules have created.
Following those rules means that every single product we offer has to be reviewed every single year to ensure that it remains fair and effective.
For brokers like ourselves who advise large numbers of private and corporate clients with a range of complex requirements, it is no small undertaking and demands a lot of resources as well as a considerable amount of attention.
The FCA, it seems, has been made well aware of the burden that its compliance mechanisms place on insurers and brokers alike.
These are sentiments which I am very familiar with in my current role as Chairman of the British Insurance Brokers’ Association (BIBA) Manchester regional committee.
As a result of the strength of feeling, the FCA has now launched a consultation to determine whether its rules might be streamlined to make adhering to them easier.
The Authority’s Chief Executive, Nikhil Rathi, has described how, by making compliance less complicated or onerous, it could foster innovation and growth within the overall financial services sector.
Firms have until the end of October to make their views known on what changes might be made and what positive impacts they might deliver for businesses and their customers.
Just as I welcomed the advent of the Consumer Duty rules, I think the FCA’s latest announcement is a development which will be warmly embraced by my industry peers.
It shows that the FCA is not only fulfilling its mission of protecting consumers but listening about how that might best be done.
I should make absolutely clear that Consumer Duty still has our total support. It quite rightly makes the needs of customers the central focus of what we do, ensuring that we offer the correct product.
At its heart, insurance stimulates the economy by allowing individuals and businesses to pursue their goals without the fear of catastrophic financial loss.
The industry must be regulated correctly to protect those who rely on it and that should always be the priority.
Being able to achieve that objective in a way which eases at least some of the current regulatory burden would be welcomed not just by myself – someone who has worked in this profession for 40 years – but by many, many others.
Written by Gary Ward, Director of Operations and Compliance, Broadway Insurance Brokers