As lockdown eases and the economy attempts to rebound from COVID-19, insurers will be left with not only the financial fallout but the significant task of restoring their reputation and rebuilding customer trust, confidence and satisfaction whilst under the FCA “spotlight”.
Independent assurance demonstrating that COVID-19 related Business Interruption claims were ultimately resolved fairly and promptly could be a first step in combatting reputational damage. With the FCA, Financial Ombudsman Service and media likely to use the outcome of the FCA test case in the High Court as a benchmark for assessing an insurer’s behaviour, independent validation of adherence to the ruling and consistency of claims approach will help align interest for shareholders, the FCA and the media.
Insurers will need to establish and document their governance and review procedures around the policy wording and claims received. At the same time, it is critical that the claims already received and processed are linked to specific policy wordings and clauses. This will enable an insurer to readily update the analysis for findings from the test case, particularly for any claims either rejected or in progress where the test case calls for a different outcome. Claims should be distinctly categorised into test case claims; guidance claims; and unaffected claims. The FCA has imposed response times for insurers, following the outcome of the test case, which must be met.
FTI Consulting is helping companies navigate decision-making in light of these challenges. Learn how insurers can build resilience here: https://ftiemea.to/winningrebound