Brokers’ Perspectives on the New Consumer Duty: Insights from rebuildcosts.co.uk

Brokers' Insights on the New Consumer Duty: Understanding the Impact on Rebuild Costs

At RebuildCosts.co.uk, we recognise the significance of the new Consumer Duty rules and their implications for the insurance industry in the UK. To gain valuable insights, we surveyed insurance brokers, aiming to understand their perspectives on the Duty, with a particular focus on rebuild costs. In this article, we will delve into the opinions shared by brokers, shedding light on their views concerning the new regulations, the challenges of underinsurance, and the level of support available.

Positive Reception of the Consumer Duty: Our survey revealed that over half of the insurance brokers (54%) supported it, recognising its potential to change customer interactions positively. Many brokers appreciate that the Duty encourages responsible practices, benefiting the industry and policyholders. They believe that all parties in the insurance chain should meet the exact requirements, emphasising the importance of transparency and fairness. Brokers highlighted Duty’s potential to strengthen client relationships and foster trust.

Concerns Raised by Opposing Views: While most brokers embraced the Consumer Duty, a notable percentage voiced doubts about its implementation. Some felt that the Duty could be excessively intrusive, raising questions about the proportionality of its requirements. They expressed concerns that complying with the Duty might lead to additional administrative burdens without significant customer benefits. A few brokers also worried that the Duty could inadvertently undermine the importance of their communications, reducing client engagement.

Brokers’ Confidence and Support: In terms of understanding the Duty’s requirements, a significant portion of brokers (61%) expressed confidence, with 9% indicating a high confidence level. However, it is essential to acknowledge that a considerable percentage (39%) still needed clarification about fully grasping the Duty’s expectations. When asked about the level of support they received, 45% of brokers reported feeling adequately supported, while the remaining 55% expressed a desire for more assistance.

The Importance of Addressing Underinsurance: An overwhelming 78% of insurance brokers highlighted the critical issue of underinsurance when considering compliance with Consumer Duty. They stressed the pivotal role of brokers in guiding clients towards appropriate sums insured, enabling them to understand the importance of accurate rebuild cost assessments. Brokers emphasised the potential consequences of underinsurance, especially regarding safeguarding high-value assets. They underscored the need for comprehensive coverage to ensure clients’ financial protection in the face of potential losses.

RebuildCosts.co.uk recognises the significance of the new Consumer Duty and its impact on rebuild costs. The insights provided by insurance brokers shed light on the industry’s response to the Duty, revealing a combination of support and concerns. While many brokers embrace Duty’s goals of enhancing customer interactions and fairness, others raise valid questions regarding its implementation and potential administrative burdens. Brokers must continue developing a thorough understanding of the Duty’s requirements while seeking adequate support. Addressing the issue of underinsurance remains a top priority, as brokers play a vital role in guiding clients towards accurate rebuild cost assessments. At RebuildCosts.co.uk, we are committed to supporting brokers through these regulatory changes, empowering them to provide the best possible advice to their clients and ensuring the appropriate protection of rebuild costs.

Share this post with your friends

Leave a Reply