The FCA’s latest release of the General Insurance Value Measures data (covering January–December 2024) is not just a regulatory update; it is a critical trigger for every insurance broker.
While this data spotlights insurers, it demands immediate action from distributors like you to ensure your products demonstrably deliver Fair Value and meet the robust expectations of PROD and the Consumer Duty.
For time-pressed compliance leaders and directors at SME brokerages, this guide translates the regulator’s data release into clear, actionable steps for a smooth, auditable annual review.
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Understanding the Regulator’s Focus
The FCA publishes this data to enhance market transparency and provide objective indicators for assessing value across general insurance products. This dataset offers crucial market insights into products, including:
- Claims Frequency and Acceptance Rates
- Average Pay-outs
- Claims Complaints Rate
Your Key Takeaway as a Distributor
The FCA utilizes this data to assess the market and intervene where they identify low value. Your responsibility is to use this external benchmark to inform and validate your own annual assessments, ensuring the products you distribute are not outliers and continue to represent a good outcome for the customer.
Why This Data Triggers Your Annual Compliance
The Value Measures publication serves as a timely reminder that your annual product review is due. This compliance obligation is anchored in two foundational regulatory requirements:
1. PROD: The Annual Review Obligation
Under the Product Oversight and Governance Sourcebook (PROD 4.2.34R–35R), all insurance manufacturers and distributors are required to review their products at least annually. This review must confirm that the product continues to:
- Deliver fair value.
- Meet the needs, characteristics, and objectives of its target market.
Crucially, this annual requirement applies to every product you distribute, even if the manufacturer doesn’t specifically report on it in the Value Measures data.
2. Consumer Duty: Evidencing Fair Value
The annual PROD assessment is the primary mechanism for demonstrating compliance with the Consumer Duty’s Price and Value Outcome (PRIN 2A.4). This requires you to evidence that the product provides a reasonable balance between price and customer benefit throughout its entire lifecycle.
For brokers, this means:
You must show that your distribution arrangements, including your own remuneration, are consistent with the product offering fair value, and you have adequate oversight of the manufacturer’s initial assessment.
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3 Actionable Steps to Strengthen Your 2025/2026 Review
We are currently helping our clients integrate this new data for a robust and defensible annual review. Here are the three critical steps your firm should be taking now:
1. Benchmark Your Portfolio Against Market Indicators
Do not rely solely on the manufacturer’s data. You must strategically integrate the FCA’s Value Measures data to:
- Validate the Manufacturer’s Assessment: Cross-reference the claims acceptance rates and pay-out ratios of the products you distribute against the aggregated market benchmarks released by the FCA.
- Identify Potential Outliers: If a product you distribute shows significantly lower claims acceptance or a reduced payout proportion compared to the market average, you must have clear, documented justification for why you continue to distribute it.
2. Integrate Findings into Your Governing Body Report
Your Consumer Duty Governing Body Report must be completed at least annually. The findings from this product review are essential inputs.
- Track Trends: Use this year’s data to track progress against last year’s report. Are there positive or negative trends in value measures that require board attention or remedial action?
- Demonstrate Oversight: This integration provides clear, executive-level evidence that the firm is actively reviewing and managing its obligations under the Price and Value Outcome.
3. Strengthen Your PROD Documentation
In the event of an FCA inquiry, clear documentation is your strongest defence. Ensure your records clearly demonstrate:
- Target Market Review: A re-confirmation that the product remains suitable for its identified target market, particularly considering the needs of vulnerable customers.
- Value Justification: A clear rationale justifying the value delivered to the end customer, especially in cases where complex distribution chains or high commissions are involved. The distribution costs must not detract from the product’s overall value.
Need Support Navigating Your Annual Review?
Effective product review under PROD and the Consumer Duty is a powerful tool for good governance and client retention.
My Virtual Compliance supports SME brokers by:
- Benchmarking their products against the current market data and FCA indicators.
- Integrating the latest data into the annual Governing Body Report.
- Strengthening documentation to clearly demonstrate full alignment.
Ensure your portfolio is compliant and auditable before year-end. Contact us now for a free consultation.
