Beyond the Price Tag: How Insurance Brokers Can Prove Fair Value Under the FCA’s Consumer Duty

The FCA’s Consumer Duty has changed the game for insurance brokers.
The initial Fair Value Assessment (FVA) may have ticked a compliance box, but the real work has only just begun.

Fair Value isn’t a one-off exercise — it’s an ongoing responsibility to prove that your products and services deliver genuine benefit compared to the total cost customers pay.

This guide breaks down a four-step framework to help SME insurance brokers turn their Fair Value documentation into a living, breathing part of their compliance strategy.

READ ALSO: Vulnerable Consumers – What Insurance Brokers should be doing

Part 1: Gather the Right Evidence

The FCA expects brokers to evidence Fair Value — not just declare it.
That means collecting measurable data that shows customers are getting a reasonable deal.

Evidence Category	Key Data Points to Collect	Compliance Purpose
Monetary Analysis	Total cost to customer (fees, commission, insurer charges), benchmarked against market pricing.	Demonstrates pricing is not excessive and aligns with market norms.
Customer Outcomes	Complaint volumes, claim acceptance rates, average handling times, renewals and retention data.	Shows customers are satisfied and getting tangible benefit.
Target Market Fit	Data showing sales align with your defined target market under PROD rules.	Ensures products are sold to the right customers and deliver value.
Process Efficiency	Time from first contact to policy issue or claim resolution.	Proves you’re delivering value through speed, clarity, and service.

Part 2: Highlight Your Non-Monetary Value

Fair Value is explicitly not just about being the cheapest option. For SME insurance brokers, the true value often lies in the non-monetary elements, the expertise and service that justifies your fee. This is your competitive edge and your primary source of defensible value.

Fair Value isn’t just about being the cheapest — it’s about justifying your fee through expertise and service.

Here’s how brokers can make that visible:

• Expertise & Advice: Show that your team’s skillset adds value. Link FVA evidence to your SM&CR records, training logs, and sector qualifications.
  Customers aren’t just paying for a policy — they’re paying for your judgment.
• Customer Support: Highlight your response times, account management model, or client portal features.
  These contribute to the “Customer Support Outcome” under Consumer Duty.
• Clarity & Communication: Simplify your policy documents and communications. Track reductions in customer queries or misunderstandings as proof of improved outcomes.

Part 3: Test the Entire Value Chain

Your Fair Value responsibility extends across the whole distribution chain, not just your own fees.
That means assessing the insurers and third parties you work with.

• Challenge Manufacturers: Don’t just file away an insurer’s Fair Value Assessment — compare it to your customer data. If complaints or poor outcomes appear, you have a duty to act.
• Spot Value Leakage: Review any third-party costs (platform, admin, etc.). If they add cost without customer benefit, that’s a red flag.
• Prove Oversight: Keep written records of your product selection process.
  Demonstrate you’ve chosen products based on value, not just commission.

Example: If one insurer’s product generates twice the claims delays of others, that evidence belongs in your FVA.

READ ALSO: The FCA’s fine to JLT- and 4 things you should do about it.

Part 4: Build a Continuous Review Framework

The FCA expects Fair Value to be monitored, reviewed, and refreshed — not left to gather dust.

Structure your review process around three pillars:

1. Defined Trigger Events: Set automatic reviews when key events occur, such as:
   • Spikes in complaints
   • Product changes
   • Commission or cost structure updates
   • Market price shifts
2. Annual Board Reporting: Your Consumer Duty Board Report should explicitly confirm compliance with the Price & Value Outcome, citing live data gathered during the year.
3. Align with PROD: Sync your Fair Value reviews with your Product Governance (PROD) cycle to save time and improve consistency.

Final Takeaway: Fair Value as a Growth Strategy

When done well, Consumer Duty compliance becomes a commercial advantage.
A transparent, data-driven Fair Value framework builds trust with customers, strengthens insurer relationships, and protects your firm from FCA scrutiny.

At My Virtual Compliance, we help SME insurance brokers build, implement, and automate their Fair Value and Consumer Duty frameworks — turning regulation into reputation.

Need help with your Fair Value Review or Consumer Duty Board Report?
Book a Consultation with My Virtual Compliance.