Today the FCA released its annual plan and started by explaining that the plan covered a 3-year horizon. Importantly the Plan also offered the insurance market a significant benefit in the form of no increase in fees for this year as well as a time to pay those fees, at least for small and medium firms. Another welcome offer from the FCA and the third in as many weeks.

The Plan is not the most detailed that we have seen but what it lacks in depth it makes up for in focus.

Key Priorities

The FCA has set out the following 5 key priorities for the next one to three years:

  • Transformation of how they work and regulate. A greater and smarter use of technology resulting in:
    • Faster and more effective decision making,
    • Prioritisation of outcomes for customers,
    • A more focused and co-ordinated approach to the information and intelligence they receive, and
    • The ability to influence internationally on issues that affect UK markets and consumers.
  • Enabling effective consumer investment decisions leading to:
    • Investment products being suitable for consumers’ needs,
    • Consumers being able to make effective decisions about their investments, and
    • Firms operating under high regulatory standards to act in the best interests of consumers.
  • Ensuring consumer credit markets work well to ensure:
    • Consumers can find products that meet their needs,
    • Consumers do not become over-indebted,
    • Affordable credit is available, and
    • Consumers can take control of their debt early if they fall into financial difficulty.
  • Making payments safe and accessible permitting:
    • Customers to be able to transact safely with payment firms,
    • Payment firms to meet their regulatory responsibilities while competing on quality and value, and
    • Consumers and SMEs having access of a variety or payment services.
  • Developing fair value in a digital age so that:
    • Consumers can choose products that meet their needs at a suitable quality and price,
    • Digital innovation and competition supports greater value for consumers,
    • Vulnerable consumers are not exploited or targeted with poor value products and services.

It may initially seem that little in this plan is of relevance to general insurance and protection products but that initial thought should be set aside as the themes run through all that the FCA is focused on over the timeframe identified.

The FCA Plan goes on to identify specific work which will cover a series of sectors and has application to general insurance. It then sets out the issues which are specific to general insurance and protection products.

Cross Sector Focus

The FCA has identified the following as being areas which it will focus on that have an impact across the sectors it regulates, and which have an impact on the insurance marker among others. These are:

  • Brexit – which needs no introduction
  • Climate Change – how the financial services sector will need to adapt to manage the risks that climate change poses.
  • Innovation and Technology – primarily a focus on how the FCA will use technology to better and more efficiently regulate the market but also a look at how firms will need to adapt to new technologies and use them safely, appropriately and ethically.
  • Operational Resilience – a roll out of the final Policy Statements currently in consultation designed to ensure the resilience of firms’ important business services by requiring them to invest appropriately to reduce the risk of harm to customers.
  • Financial Crime – the roll out of changes to how the FCA will reduce financial crime with an intended consequence of increasing enforcement action particularly where there is money laundering, but also fraud.
  • Culture – a continuation of the work already underway with a focus on the 4 key drivers of culture (purpose, leadership, approach to rewarding and managing people and governance) with a specific mention for solo regulated firms.

The Insurance Sector

The consequence is that each of the above are a focus for the FCA within the insurance industry, but the following also receive a specific mention. In line with the FCA’s approach of focusing on outcomes, they are identified as key objectives that the FCA wishes to achieve:

  • Customers are taking out products and services that are suitable for their needs and deliver on their promises at the time of claim – a very relevant and poignant point currently in debate in the market at this current time as the market continues to be criticised for the apparent lack of response to the pandemic.
  • Customers are not unfairly excluded from access to products and services – a continuation of their work in recent years, travel insurance for those with pre-existing medical conditions being a perfect example.

The FCA make the point that the timing of the further work they intend to publish is subject to review in the light of the pandemic and includes the work on Operational Resilience.


The Plan is brief and very focused. For the insurance industry, there is little new here from previous years but it is clear that there will be a deeper focus on these areas and for some it is a consequence of not enough having been done by the industry to get it right so far.

In the case of Operational Resilience, the plan is to carry through with the proposed work, the importance of which has been highlighted by the Pandemic. Importantly, the Pandemic has also highlighted that there is further work required to ensure products meet customers’ needs.

Want to know more?

On 29th April, we are hosting a joint webinar with the Managing General Agents Association. If you are an MGAA member and would like to attend our briefing webinar on 29th April, please register using the button below.

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If you would like to know more about the implications of the FCA Business Plan for your business, please contact us in complete confidence.​

Kenneth Underhill

Implement Compliance Solutions and Resources Ltd
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