In imposing its record fine for mis-selling add ons on high street general insurance broker Swinton, the Financial Conduct Authority sent a clear message to the wider insurance industry: we won’t tolerate any behaviour that is unfair to consumers.
In prioritising profit over treating its customers fairly, it would seem Swinton lost sight of its purpose which surely is to help its customers protect what they value?
The onset of the global economic crisis saw the banking sector accused of greed and unethical behaviour, and I honestly doubt that banks are ever going to regain the level of trust amongst consumers that they once enjoyed. The insurance industry has worked hard to distance itself from these reviled financial ‘cousins’ but let’s face it, we’re not exactly top of the popularity list.
My worry is that if we see more scandals like Swinton, we could find ourselves dragged to the bottom of the murky pond occupied by bankers.
Some of the practices adopted by aggregators are also a cause for concern if you ask me. They may promote a consumer friendly face through their moustachioed singers and furry animals, but they are guilty of a number of dubious sales tactics. The Resolution Foundation recently found that 30% of prices quoted on many comparison sites were wrong.
Stripped down products lure customers in with the promise of cheap rates, who then find the premium goes up with each additional optional extra that better quality products include as standard. Where’s the transparency in this practice? Best of all, the aggregators take no responsibility for the sale and the onus rests completely on the customer.
The unhappy truth is that the public simply don’t trust financial services full stop. It’s up to us to give them something to believe in and the only way we can secure that trust is through our actions. It’s not about getting lots of qualifications to prove we can do our jobs and it’s not about being able to tick boxes on regulatory forms. We’ve got to demonstrate what our customers mean to us and if we don’t, why should they trust us?
I think it’s safe to say that intermediaries understand the duty of care they have to their customers, but if anyone needed any more impetus than simply doing the right thing then the slap on the wrists that the regulator has delivered to Swinton should provide the kick up the proverbial. We all need to look at our business practices and get our businesses in shape so that we don’t get tarred with the same brush as bankers.
