Anyone can find themselves in a vulnerable position at any time. In the insurance industry, we have a responsibility to ensure all customers are treated fairly and that anyone considered vulnerable is supported in the right way. It can be a difficult territory to navigate so we’ve pulled together some guidance and included some useful links for further reading.
The FCA’s definition of a vulnerable customer is ‘someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care.’
Whether a sole trader or an incorporated firm, should an individual fall within this definition, appropriate levels of care must be afforded to prevent any detriment.
The core requirements to align to the FCA’s guidance are listed as:
Understanding the needs of the target market and customer base:
- Being clear on what certain customers are vulnerable to, what their likely needs are, and how this may impact their experience and outcomes
Staff have the right skills and capability to recognise and respond to the needs of vulnerable customers:
- All staff are clear on the definition of a vulnerable customer and understand how their role affects the fair treatment of vulnerable customers
- Frontline staff can recognise and respond to a range of characteristics of vulnerability
- Frontline staff show understanding and empathy towards individual’s circumstances and needs
- Promote disclosure of individual needs and inform customers of support available, including third party representation and appropriate specialist support services
Inclusive product design, flexible customer service provision, and suitable customer communications:
- Processes and procedures that can support customers’ individual needs through flexibility
- Customer communications that are suitable to the needs of the target market and customer base
- Support systems that can record the individual needs of vulnerable customers and prevent customers from repeating their individual needs
- Where possible, interacting with customers using their preferred communication channel
Ongoing monitoring and assessment of whether the needs of vulnerable customers are being met and make improvements where any shortfalls are identified:
- Introduce processes to monitor the outcomes of vulnerable customers
- Regularly review the MI and vulnerable customer outcomes
Please find links below to important information
Treating vulnerable consumers fairly | FCA
Guidance for firms on the fair treatment of vulnerable customers | FCA
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