A follow-up review conducted by the Financial Conduct Authority (FCA) has urged for further improvements to be made to the mobile phone insurance industry.
The review follows a report made in 2013, also by the FCA, which found that some mobile phone insurance products were unclear and inadequate. The report concluded that whilst mobile phone insurance can be useful and have its benefits, it warned that policies need to provide the level of protection they promise and to operate fair claims processes.
Two years’ later the FCA’s follow-up review has found that whilst some insurance policies have been reformed and improved, there is still plenty of improvements to be made in ensuring fair outcomes are made to customers with mobile phone insurance policies.
The FCA’s follow-up review analysed a total of 14 firms and found that many had executed the recommendations made by the FCA in light of its 2013 report, such as speeding up the processing time it takes to process and receive claims. One of the most significant improvements was a firm which had 91 percent of its claims accepted and settled within an average of four days.
By contrast, one of the lowest achieving insurance firms featured in the report had an average processing period of 18 days to settle a claim, thus demonstrating the significant divergences within the mobile phone insurance sector. The outcome of the follow-up review was that improvements still need to be made in order for mobile phone insurance companies to provide fair outcomes for their customers.
Talking about the FCA’s latest report, Alexis Roberts Insurance Team Partner at Pinsent Masons, said it illustrates how the Financial Conduct Authority is intent to maintain a focus on the phone insurance market and to retain momentum in making improvements for consumers.
“The report makes specific reference to the possibility that enforcement action may follow against some firms,” said Alexis Roberts, adding:
“As well as reminding firms in the mobile phone segment to the need to keep their processes under review and ensure they are meeting the FCA’s expectations, this again demonstrates the priority attached to conduct risk generally and the importance to firms of managing it effectively.”
Despite improvements being made to help consumers of mobile phone insurance get a fair and worthwhile deal, it seems there is still a long way to go until complete transparency and standardised uniformity throughout the phone insurance sector is achieved.
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