11 May 2020

Insurance in the time of COVID-19 – what we’re expecting from the industry

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By Clare Bolingford, Director of Banking and Insurance at Financial Markets Authority

Let’s be honest, insurance can be one of those reluctant purchases – something you know you should have but don’t want to spend money on, as you only need it when something bad happens. We don’t like thinking about what impact it would have if we get seriously ill or die, or thinking about an uninsured house if it’s damaged by fire.

Covid-19 has got a lot of us thinking about insurance.  Am I covered if I lose my job?  What happens if I can’t afford to pay my premiums?

The FMA has been thinking about these things too.  Uppermost in our mind is ensuring that insurers are treating their customers fairly.

Throughout lockdown, we’ve been checking in with insurance companies every week.  And, we’ve been impressed by some of the things they are doing to help their customers.

Some have been making a far greater effort to communicate with their customers, encouraging them to make contact if they are experiencing financial hardship.

Others have been increasing their training on customer vulnerability, not only for their customer service staff but also for the financial advisers who distribute their products.

While encouraged by this, I recently wrote to the insurance industry associations to highlight the importance of providing support and flexibility to their customers.  We expect firms to communicate openly and honestly with customers in a way that is easy to understand.  We also expect them to process claims and any complaints fairly and efficiently. 

If you have insurance, what should you be thinking about?

Most importantly you should make sure the cover you have is still suitable for your circumstances.  And if you think you might need to suspend or alter your cover, get advice before you make the final decision.  If you do need help because your financial position has changed, speak to your insurance provider and financial adviser (if you have one) and be clear about your situation.  They are there to help and can advise you on what options are available.