Fair Product Value

Support for insurance firms demonstrating fair value, product governance and good consumer outcomes under Consumer Duty and FCA regulatory expectations.

Support in Demonstrating Fair Value and Good Customer Outcomes

The FCA continues to place significant emphasis on firms being able to demonstrate that their products deliver fair value and good outcomes for customers throughout the product lifecycle. Under the Consumer Duty, firms are expected not only to assess product value at launch, but also to undertake ongoing monitoring and take prompt action where products, services or distribution arrangements may result in poor outcomes.

The regulator expects manufacturers and distributors to maintain robust product governance frameworks, supported by management information that evidences how products meet the needs, characteristics and objectives of their target market. This includes regular review of pricing, remuneration arrangements, claims performance, customer behaviour, complaints data, persistency trends and other outcome measures used to assess whether products continue to represent fair value.

The FCA continues its scrutiny of distribution chains, oversight arrangements, vulnerable customer considerations, and the effectiveness of firms' governance structures in identifying and addressing emerging risks. Firms should be able to evidence how product reviews are conducted, how decisions are challenged and escalated, and what actions have been taken where value concerns or customer harm risks have been identified.

For more information get in touch with a member of our expert insurance compliance team.

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What Firms Need to Evidence

Demonstrating fair value requires more than confirming that a product appears suitable or that complaint levels are low. Firms should be able to evidence how products are reviewed, how customer outcomes are monitored, and how decisions are challenged, escalated and recorded.

This may include evidence of:

  • Board and committee oversight of product governance and fair value discussions
  • Regular product reviews and outcome monitoring
  • Decisions involving material premium changes, changes to cover, product withdrawal or restrictions on new business
  • Management information used to monitor customer outcomes and product performance
  • Distribution strategies and remuneration arrangements
  • Co-manufacturing and distribution partner governance
  • Claims frequencies, loss ratios, complaints analysis and customer outcome data
  • Target market assessments and vulnerable customer considerations
  • Consumer Duty monitoring and annual Board reporting requirements
  • Action plans, governance records and evidence of remediation where potential harm has been identified
     

​​​​​​​​​​​​​​For further information about fair product value, and to download your free assessment template, visit our page Fair Value Assessments for Insurance Firms.

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How ICS Can Support Your Firm

ICS can help firms strengthen the way they evidence fair value and good customer outcomes. Our consultants can review existing governance arrangements, assess the management information available, and help identify whether your current approach provides a clear and proportionate evidence trail.

Support may include:

  • Reviewing product governance and fair value evidence
  • Assessing whether MI supports meaningful outcome monitoring
  • Reviewing Board and committee reporting
  • Identifying gaps in audit trails or decision records
  • Supporting Consumer Duty Board reporting requirements
  • Reviewing distribution and remuneration evidence
  • Advising on actions where value concerns or customer harm risks have been identified

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Fair Value and Consumer Outcomes FAQs

If there are any further question you might have that we've not covered, please get in touch and let us know.

Demonstrating fair value means being able to evidence that the price paid by customers is reasonable when considered against the benefits, cover, service and outcomes the product delivers.

Under Consumer Duty, firms should be able to show how fair value has been assessed, how products are monitored over time, and what action has been taken where value concerns or potential customer harm have been identified.

Fair value is closely linked to good consumer outcomes because firms must consider whether customers receive appropriate value throughout the product lifecycle.

This includes looking at product benefits, limitations, service standards, claims performance, complaints data, distribution arrangements and whether the product remains suitable for the intended target market. The client’s supplied content specifically frames fair value around lifecycle monitoring, product governance, target market needs and outcome measures.

Firms should retain clear evidence showing how product value and customer outcomes are monitored, challenged and acted upon.

This may include Board or committee reports, product reviews, management information, claims data, loss ratios, complaints analysis, remuneration reviews, target market assessments, vulnerable customer considerations and records of actions taken where potential harm has been identified.

No. Firms are expected to monitor product value on an ongoing basis, not simply at launch.

This means regularly reviewing whether products, services and distribution arrangements continue to deliver good outcomes and taking prompt action where concerns are identified.

Yes. ICS can support firms by reviewing existing governance arrangements, management information and audit trails to assess whether they provide sufficient evidence of fair value and good consumer outcomes.

Where gaps are identified, ICS can help firms strengthen their documentation, reporting and governance processes so that fair value assessments are embedded within the wider product governance framework.

Fair value and customer outcome monitoring are important parts of Consumer Duty governance.

ICS can help firms evidence Board and committee oversight of product governance and fair value discussions, including reports such as the Consumer Duty Board Report.

Where value concerns or potential customer harm risks are identified, firms should be able to demonstrate that these have been reviewed, escalated where appropriate and addressed through clear action plans.

This may include changes to product design, pricing, distribution arrangements, remuneration structures, customer communications or monitoring activity.

ICS can help firms ensure that appropriate governance, management information and audit trails are in place, so they can provide clear evidence that fair value is embedded within their product governance framework and that good customer outcomes are being actively monitored.

How Can We Help?

We offer up to two initial consultations without charge, to determine the exact nature of your challenges/concerns. If you would like to try out some of our compliance services before committing we can offer a demo of our Compliance Portal, samples of our Hot TopICS or attendance at one of our Webinars. Thereafter we will agree which of our services are most likely to help you most with your regulatory requirements, agree a package of support (or a one-off project) and send a detailed proposal for your approval. Before, or after, you decide to go ahead, we will introduce you to the Consultant(s) who will agree a diary of contact at times to suit you both.

Please call us on 01892 539600, email us at enquiries(at)insurancecompliance.co.uk, or send us a message using the form for more information or to make an enquiry about any of our compliance services.

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