Fair Value Assessments: FCA Consumer Duty

1. Purpose

This policy sets out the firm’s approach to product governance and fair value assessments in relation to the business insurance products we distribute. The objective of this policy is to ensure that the insurance products we arrange and distribute:

• Deliver fair value to customers
• Are distributed to the appropriate target market
• Support good customer outcomes

This policy has been developed in accordance with the Financial Conduct Authority (FCA) Product Governance Rules (PROD) and the Consumer Duty requirements under PRIN 2A, including the requirement to ensure products deliver fair value under Consumer Duty Outcome 2 (Price and Value).

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2. Scope

This policy applies to all commercial insurance products distributed by the firm. These may include, but are not limited to:

• Professional Indemnity Insurance
• Directors’ and Officers’ Liability Insurance
• Cyber Insurance
• Public Liability Insurance
• Employers’ Liability Insurance
• Office and Commercial Property Insurance
• Commercial Combined Insurance
• Management Liability Insurance
• Other business-related insurance policies

The policy applies to all employees involved in the distribution, recommendation, placement, and servicing of business insurance products.

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‍3. Definition of Fair Value

Fair value is assessed by considering the relationship between:

• The total price paid by the customer, including premiums, fees, commissions, and charges; and
• The quality, benefits, and suitability of the insurance product and associated services.

A product will generally be considered to provide fair value where:

• The cost of the product is proportionate to the level of cover and services provided
• The product meets the needs, characteristics, and objectives of the identified target market
• The distribution arrangements support good customer outcomes

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‍4. Role of the Product Manufacturer

Under FCA Product Governance rules, the responsibility for designing insurance products and conducting fair value assessments rests primarily with the product manufacturer.

The manufacturer may include:

• An authorised insurance company
• A Managing General Agent (MGA)
• A Lloyd’s of London syndicate

Manufacturers are responsible for:

• Designing and developing insurance products
• Identifying and documenting the target market
• Undertaking fair value assessments
• Ensuring the product structure, features, and pricing are appropriate
• Reviewing product performance on an ongoing basis
• Ensuring products are distributed through appropriate distribution channels

Manufacturers are also responsible for providing distributors with sufficient information to enable them to understand the product and distribute it appropriately.

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‍5. Role of the Firm as Distributor

The firm acts as a distributor of insurance products, rather than the manufacturer.

Our responsibilities as a distributor include:

• Understanding the target market for the products we distribute
• Ensuring products are offered only to customers whose needs align with the intended target market
• Providing clear, fair, and not misleading information about insurance products
• Identifying potential conflicts of interest
• Monitoring the products we distribute to ensure they continue to deliver fair value

Where advice is provided, we ensure our recommendations are consistent with the client’s demands and needs.

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‍6. Distribution Arrangements

When arranging business insurance products, we aim to ensure that clients:

• Understand the scope and purpose of the insurance cover
• Are aware of key exclusions, limitations, and policy conditions
• Select insurance products that are appropriate for their business activities and risk exposures
• Have sufficient information to make informed decisions regarding their insurance arrangements

Our distribution arrangements are designed to support transparency, clarity, and appropriate product selection.

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‍7. Assessing Fair Value in Distribution

While the manufacturer is primarily responsible for conducting fair value assessments, we undertake our own distribution level oversight to ensure the products we distribute remain appropriate.

This includes consideration of:

• The breadth and quality of policy coverage
• Policy limits, excess levels, and exclusions
• The financial strength and reputation of insurers
• The insurer’s claims handling performance
• The overall cost of the product relative to the level of protection provided

Where we identify concerns regarding value, product suitability, or distribution practices, we will raise these with the product manufacturer and consider alternative solutions where appropriate.

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‍8. Remuneration and Charges

The firm may receive remuneration for arranging insurance through:

• Commission paid by insurers
• Broker service fees paid by clients
• A combination of both

We ensure that our remuneration arrangements are transparent and do not conflict with our obligation to act honestly, fairly, and professionally in the best interests of our clients.

Details of our remuneration can be provided upon request.

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‍9. Ongoing Monitoring and Product Review

We undertake periodic reviews of the insurance products we distribute to ensure they continue to:

• Meet the needs of the intended target market
• Deliver fair value to customers
• Align with regulatory requirements

These reviews may include consideration of:

• Claims experience and insurer performance
• Market developments and product innovation
• Client feedback and complaints data
• Changes in regulatory requirements

Where concerns arise regarding product value or suitability, we will engage with insurers and consider alternative insurance solutions where appropriate.

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‍10. Consumer Duty and Customer Outcomes

In accordance with the FCA Consumer Duty, the firm is committed to delivering good customer outcomes throughout the insurance lifecycle.

This includes:

• Providing clear and accessible information about insurance products
• Ensuring products are suitable for the intended target market
• Supporting clients in the event of a claim
• Monitoring customer outcomes and identifying areas for improvement

We aim to ensure that clients receive appropriate protection for their business risks and understand the insurance arrangements put in place on their behalf.

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‍11. Governance and Policy Review

Responsibility for oversight of this policy rests with the firm’s Senior Management and Compliance Function. This policy will be reviewed at least annually, or sooner if required due to:

• Regulatory changes
• Changes to the firm’s distribution arrangements
• Material developments in the insurance market

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Under the FCA’s Consumer Duty, we are required to ensure that vulnerable individuals receive outcomes as consistently good as those of any other client.