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Sicsic Advisory Presentation at BrokerFest 11th February 2020
- 1. BrokerFest 2020 Regulatory Outlook for Brokers
- 2. Let’s start with the boring stuff !1
- 3. 3 REGULATORY ACTIVITIES IN THE LAST 15 MONTHS 11 February 2020
- 4. 4 WHAT IS ALL ABOUT ? 11 February 2020 WHAT THE FCA IS TRYING TO ACHIEVE? WHAT THE FCA IS SAYING? HOW DO THEY GO ABOUT IT? Protecting Consumers from Harm • Buying unsuitable or mis-sold products / services • Important consumer needs are not met • Prices too high / quality too low • “Our view of the General Insurance (GI) sector overall is that there are significant risks of harm “ • “we require firms to deliver a step-change in their culture “ FCA Portfolio Strategy for Insurers, Letter 8th January 2020 BIBA speech, May 2019 Business Model & Strategy Culture & Governanc e
- 5. Six areas of focus2
- 6. 6 TOP 3 AREAS FOR GENERAL INSURANCE 11 February 2020 PRODUCT / DISTRIBUTION PRICING PRACTICES SALES • Ultimate value that customers received from products and services • Control over the remuneration they receive • Roles and remuneration of the various actors in the value chain • Oversight of delegating authorities • Impact of distribution strategy Fairness in pricing practices • Oversight of pricing • Propensity model • Differential pricing • Potential Discrimination • Communication • Complaints / FOS • Demands & Needs • Suitability of advice • Communication • Phone / Web / Face to Face • Premium Finance
- 7. 7 ADDITIONAL 3 AREAS FOR BROKERS 11 February 2020 CONFLICT OF INTEREST CLIENT MONEY UNRATED INSURERS DUE DILIGENCE • Product Providers • Wholesale Brokers • MGA • Retail Distribution • Follow the rules • Audit quality • Fraudulent behaviours • It is about the service you provide • Know Your Insurer (KYI) • Advised / Non-Advised • Existing / New Client • Concentration risk
- 8. How to thrive in this context ?3
- 9. 9 BUSINESS MODEL REVIEW 11 February 2020 BUSINESS MODEL SUSTAINABILITY Revenues & Profit Sharing Premium Finance Add-Ons Fees & Charges Income Streams Other Income
- 10. 10 FOCUS ON PEOPLE 11 February 2020 INDIVIDUAL ACCOUNTABILITY • Clarity about who does what • Training & support – Fit & Proper • Initial and future impact of the regime • healthy (or not) tension • non-financial misconduct • M&A transactions • Individual careers
- 11. Key Takeaways4
- 12. 12 KEY TAKEAWAYS • Focus on your business model • Focus on your people • Benchmark and improve your practices on an ongoing basis 11 February 2020