1. The FCA and its Competition Agenda
– what could this mean for Insurers?”
Hilton Euston Hotel
20 January 2017 | Strictly Private & Confidential

2. Introduction

3. Compliance Monitoring
Phil Deeks
TCC
Technical Director
Conduct & Culture
FCA
Technical Specialist
Sector Team
Deloitte
Senior Manager
Risk & Regulation
Legal & General Group
Compliance Policy
Millfield Group
Compliance Manager
Compliance Monitoring
Fin Proms
21/09/2018

4. FCA’s competition agenda

5. FCA’s Operational Objectives
FCA Objectives
FCA’s Strategic Objective
To ensure that the relevant markets function well
FCA’s Operational Objectives
To secure an appropriate degree of protection for consumers
To protect and enhance the integrity of the UK financial system
To promote effective competition in the interests of consumers

6. FCA’s competition objective
“To promote effective competition in the interests of consumers.”
2013 FCA objective and duty
2015 FCA concurrent responsibility
FCA’s Viewpoint
Competition can deliver lower prices, improved quality of service, better value for money and new and innovative products.
Done properly regulation can help competition thrive.
Competition is not an alternative to regulation.
Proportionate regulation is a pre-requisite for competition in financial services to thrive.

7. FCA Competition Division
Embedding competition thinking across the wider policy, supervision and enforcement work the FCA carries out
AIM
Forms part of Chris Woolard’s remit - Strategy & Competition
Headed up by Mary Starks and Deb Jones, with 60 staff
LOGISTICS
Identify concerns and address issues which inhibit the ‘virtuous circle of competition’
APPROACH

8. FCA Competition Division – the virtuous circle
Well informed and engaged consumers can play a key role in driving effective competition between
firms
Effective competition provides firms with incentives to deliver what consumers want, provide value for money efficiently with innovation

9. FCA Competition Division
INDICATORS
TOOLS
Market concentration
Entry and expansion
Consumer satisfaction
Shopping around and switching
Merger Control
Market Study
Prohibition against anti-competitive agreements
Prohibition against abuse of dominance
Firm engagement (individual discussions, advisory letters, on-notice letters)
Behavioural Economics

10. FCA competition agenda
Areas where the FCA has focussed on competition
Retirement Income Market Study
Asset Management Market Study
Fair treatment of long standing customers in the life insurance sector
Credit card market study
Current account switching
General Insurance add-on markets
Increasing transparency and engagement at renewal stage

11. FCA Competition Division - achievements
Well informed and engaged consumers can play a key role in driving effective competition between firms
Effective competition provides firms with incentives to deliver what consumers want and to provide value for money as efficiently and innovatively as possible
Helped consumers to act on their decisions
Helped consumers get the information they need
Simplified processes
Helped consumers assess the best choices for them
Encouraged innovation
Used powers to ensure firms
compete fairly

12. Competition in insurance sector

13. Competition in the insurance space
Potential Areas of Focus
Distribution
Concentration and integration
Price
Renewals
Increasing costs
Technology
Implementation of interventions
Individual firm engagement
In fact, any area of inappropriate use of BE/data

14. What steps can a firm take?

15. What steps can a firm take?
Culture and governance
Robust product/service governance model
Peer benchmarking
21/09/2018

16. What steps can a firm take?
Culture and governance
21/09/2018

17. meeting the specific rule requirement
Culture
PAST
PRESENT
FUTURE
Compliance is …
meeting the specific rule requirement
Conduct is …
looking at the spirit of the rule to design a solution that will achieve a good customer outcome
Culture is …
understanding and then executing the right thing for customers driven from the firms’ inbuilt and inherent behaviours, values, thinking and decision making.
21/09/2018

18. FCA’s expectations of firms
Senior individuals accountable for defined roles and areas of the business
Senior team can to articulate what good outcomes for customers looks like and key principles of good market and consumer behaviour are and deploy them
Culture of accountability at levels within firm
Proactively and instinctively identify customer risks from their business model, strategies and operational process – and exert effort to address them
21/09/2018

19. What steps can a firm take?
Culture and governance
Robust product/service governance model
21/09/2018

20. Product/service governance model elements
Business Model
Conflicts of interest
Value for money
Appropriate target market
Design and develop’nt of product/ service features
Objective Customer Research
Idea generation
Appropriate distribution proposition
Information to distributors (if applicable)
Stress Testing and modelling
Appropriate customer information
Ongoing maintenance and review
Post sales servicing MI MI
Corporate governance
21/09/2018

21. What steps can a firm take?
Culture and governance
Robust product/service governance model
Peer benchmarking
21/09/2018

22. Thank you Any questions?
Phil Deeks

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