24 Treating customers fairly – towards fair outcomes for consumers
9 See, for example, John Tiner’s speech, ‘Principles-based regulation & what it means for insurers,’ March 2006,
www.fsa.gov.uk/pages/Library/Communication/Speeches/2006/0320_jt.shtml.
10 For the management information survey we sent a questionnaire to a sub-set of those firms who reported on their
progress with the TCF initiative more generally, as outlined in paragraphs 3.6 to 3.11. We asked the firms about what
management information they had developed, what they used it for and who reviewed and dealt with the management
information. We received responses from 44 firms. PricewaterhouseCoopers assisted us with the analysis.
11 Management Information cluster report, July 2006. See www.fsa.gov.uk/tcf.
3.16 We encourage firms who are already well advanced in their TCF work to
maintain their momentum. We believe, and many firms tell us, that it is in
firms’ own commercial interest to raise standards of customer treatment.
Furthermore, where senior management successfully show an appreciation of
what is required by the TCF initiative (and principles-based regulation more
generally) we are able to make our regulation less intrusive.
9
Monitoring TCF performance – Management Information
3.17 Having determined the programme for achieving TCF, senior management will
need to use appropriate management information to measure whether they are
treating customers fairly and whether their aspirations for change are being
realised throughout the business. Identifying appropriate management
information continues to be a challenge for many firms. In particular, it is
essential that firms use measures that distinguish between customer satisfaction
and fair treatment of customers. The poor financial capability mentioned in
Chapter 2 means that fairness and satisfaction are unlikely to be synonymous.
A customer can, for example, be satisfied with an unsuitable product or
dissatisfied with an entirely fairly adjudicated general insurance claim. Until
senior management are able to judge the firm’s performance against appropriate
management information, it will not be possible for them to assess their TCF
performance adequately or to conclude they are embedding.
3.18 To find out how firms are approaching the use of management information for
TCF we surveyed a sample of different sized firms (excluding the very small)
across a range of sectors.
10
Our detailed findings, including the types of
management information firms are using, are set out in a separate cluster report
on our website.
11
We consider that it is for firms to determine for themselves
what type of management information is required, according to the nature of
the business they undertake. We also do not expect that TCF should require
substantial amounts of new information but that firms can perhaps think
differently about data that are already available. This has been confirmed by our
survey. Most firms surveyed reported that they expected less than 20% of their
TCF management information to be derived from new or additional data.
3.19 The results showed that few firms had fully implemented their TCF
management information programmes. The majority expect to do so by the
end of 2006 and TCF management information is therefore one of the last
elements to be addressed within firms.