FCA calls for better access to insurance

Travel insurance

The UK Financial Conduct Authority (FCA) has called on travel insurers to improve access to insurance for customers with pre-existing medical conditions in newly published feedback.

In June 2017, the FCA issued a Call for Input (CfI) on access to insurance, aiming to gather evidence to help address the concerns about people with pre-existing medical conditions obtaining affordable travel insurance.

“People with pre-existing medical conditions feel poorly served by travel insurance,” said Christopher Woolard, Executive Director of Strategy and Competition at the FCA. “There are specialist services out there, but, often, people don’t know where to find them. We’ll work with industry to point people in the right direction and help dispel some of the myths and misunderstandings to ensure this market works better. This will also form part of our continuing our work on insurance pricing practices, which are designed to lead to long-term positive changes across the market.”

The FCA estimates that there are currently 15 million people in the UK living with at least one long-term health condition, with this figure likely to rise to 18 million over the next decade.

The key themes that came out of the CfI, which generated a ‘high level of interest’, include: a lack of quality information on alternative options available to consumers after they receive a high quote or are refused cover; a general lack of understanding amongst consumers and firms around insurance terms and the risk factors that are considered by providers when calculating the premium; and a lack of transparency around pricing, the risk factors that drive quotes and how premiums are calculated.

The Association of British Insurers has already responded to the FCA’s feedback, with Head of Conduct Regulation Raluca Boroianu-Omura saying that it was open to considering other ways of helping people to understand and find cover for them. 

“The main purpose of travel insurance is to cover the cost of emergency medical treatment overseas,” said Boroianu-Omura, “with insurers paying out medical claims worth around £200 million a year. This means a person’s medical history is particularly relevant when they are buying cover.”

Others have also replied to the feed back. Melissa Collett, Professional Standards Director at the Chartered Insurance Institute said: “One in three people living in the UK are likely to get cancer at some point in their lives and it is absurd that this large group are prevented from travelling because they cannot get insurance or worse, forced to risk travelling without it. Many people living with cancer and those in remission live healthy and full lives and we should be doing all we can to support them in this.”

BIBA’s Executive Director, Graeme Trudgill, said: “The FCA has highlighted a number of important points within its report.  We have been calling for wider signposting in our Manifesto to help customers and improve financial inclusion.  We have long identified that the biggest challenge is awareness and that more providers need to actively engage in signposting. We believe that BIBA has a leading role to play because we  have specialist insurance brokers in our membership with the insurance solutions that customers need, and improved signposting will enable more customers to access cover.

Sarah Page of Insurancewith commented: "We’re glad to see the FCA commenting on an issue that those with a cancer diagnosis find themselves faced with every time they want to go on holiday. We regularly hear about customer’s experiences with different providers giving them quotes between hundreds or thousands of pounds, or declining them cover altogether at the slightest mention of the C-word."