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Insurers fall foul of new communications rules. How can you ensure compliance?

Insurers fall foul of new communications rules. How can you ensure compliance?

A handful of insurance companies have had their wrists slapped for failing to properly highlight messages designed to remind customers that their premiums were increasing, and encouraging them to seek comparisons.

New rules

The Financial Conduct Authority (FCA) introduced new guidelines aimed at preventing insurers from penalising long-term customers who automatically renew their policy. Some customers fail to notice that their premiums increase each year because the news is hidden in a larger communication. This means that customers aren’t prompted to shop around for a better deal. Over many years this effect may be compounded, resulting in the most loyal customers paying the highest prices.

FCA guidelines force insurers to highlight increases in premiums and clearly show the difference between the new premium and the previous year. Insurers must also remind customers that they could save money by switching to an alternative provider.

Minimising messages that could lose customers

Clearly, these messages may run contrary to the natural tendencies of a money-making business. Businesses typically want to encourage customers to stay put, and so they generally try to minimise any appearance of increasing costs.

We’re not suggesting that the insurers in question were trying to circumvent the FCA regulation, but it’s not surprising that companies would have sought to meet the guidelines while reducing the impact on their customers. The FCA guidelines put insurers in an awkward position; they want to adhere to the rules, but they also need to create customer communications that are clear, simple and good for business.

Some people have suggested that the FCA should have been clearer when stipulating the orientation and size of the required language. This might have avoided the uncertainty that has led to several insurers falling foul of the rules.

Walking the compliance tightrope

In these cases, when customer communications must comply with specific regulations, the design, layout, branding and language used walks a tightrope; it must be ‘correct’ every time, regardless of how a letter, email or text message is composed, by whom, or when. Mistakes are easy to make, even with the best intentions and the most qualified teams.

Compliant by design

One way to reduce the risk of errors and incompliant communications is to build compliance into your customer communication management (CCM) platform. Document templates should include the compliant messaging and layouts as standard, and those elements that are essential for compliance should be locked and only editable by senior stakeholders. By building compliance into the system, it becomes impossible for users to create or send messages that don’t comply, while also creating space for your teams to incorporate all the branding and messaging that your customers need.

As for the insurers, it seems that the new regulations are not having a significant impact on switching rates. This could be because insurers are offering competitive rates to encourage customers to remain, or it could be that, for many people, switching insurers is an avoidable inconvenience. Or perhaps many customers feel content with the service they’re already receiving.

The DocCentrics solution

With our CCM platform you can create, manage and send communications to all your channels from a single interface. With DocCentrics, it’s easy to manage compliance requirements, while giving your teams enough creative freedom to compose compelling communications. Want to know more? Contact our team today.