Watchdog gives insurance brokers clean bill of health on competition worries
Regulator the Financial Conduct Authority (FCA) today said it had not found evidence of significant levels of harm in its probe into insurance brokers, meaning that “intrusive remedies” will not be necessary.
The FCA launched its analysis of the wholesale insurance brokers market in November 2017 to assess how competition was working in the sector.
It said that while it had not found serious issues, it had identified areas of concern which have scope for improvement.
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Areas flagged include management of conflicts of interest, the information firms disclose to clients and contractual agreements between brokers and insurers which have the potential to limit competition.
The FCA said it will work with firms to address concerns found in these areas.
It said it will continue to monitor the market, looking at the possible impact of Brexit, further consolidation in the industry and as a consequence of any changes in business models.
Christopher Woolard, FCA executive director of strategy and competition, said: “This was a significant and in-depth analysis of a sizeable and complex market to determine whether clients were at risk of harm.
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“Encouragingly, we found no evidence that they were but we found some areas with scope for improvement and we will work with the industry to ensure these are addressed. We would like to thank the firms and industry groups who participated in the study.”