GI – value measures

We have received the following from the FCA.



We want to draw attention to a new FCA publication;

As you will be aware, in our General Insurance (GI) add-ons market study (MS14/1) we identified poor product value as an area of harm in general insurance. This has been caused by ineffective competition between providers of retail insurance products and a lack of common measures of value. To help address this we introduced new rules to report and publish data on value measures, as set out in our Policy Statement (PS20/9).  

This is the first time we have collected and published this full data set, albeit that it covers a 6-month reporting period (July to December 2021), outside of the original pilot firms and products.

The data will provide firms, market commentators and organisations such as consumer groups with common indicators of value across a range of GI products. By publishing this information, we aim to create incentives for firms to compete on broader elements of product value than price alone, and to improve the value of the products and services they offer consumers.  

We have looked at claims costs as a proportion of premium. At an aggregated product level (where a minimum of 5 firms reported data): 

  • Claims costs as a proportion of premium range from 5.21% for GAP Insurance (Add on) to 65.95% for Motorcycle (all).  
  • For some products, add-ons have on average lower claim costs as a proportion of premiums, compared to the corresponding standalone product.  
  • We note that products with the lowest % of premiums paid out in claims included GAP Insurance (Add-on and standalone), Travel insurance (various), Excess Protection Insurance (Add-on) and Personal Accident Insurance (Add-on).

We are concerned about how the current picture presented in the data appears to compare with firms stating that virtually all products are providing fair value.  

In Policy Statement PS20/9 we said that we would not require firms to report claims cost information for legal expenses insurance or vehicle breakdown insurance. The data does not include related metrics for these products.

We will be closely analysing the next data set due in February 2023, as well as testing the robustness of firms’ product oversight and governance arrangements, including fair value assessments. 

In addition to our observations, we have referenced the linkage to the Consumer Duty as value metrics could also be potential indicators of wider issues under the Consumer Duty, helping to show if consumers are getting good outcomes. 

We expect the publication’s observations to be relevant to GI firms as they may be responsible for value measures reporting is set out in SUP 16.27.7R and SUP 16.27.8R.  


Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

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Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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