Consumer Duty – outcomes monitoring for general insurance

The FCA’s review drew on board reports, responses to information requests and a survey of 56 firms across a range of sectors, sizes and business models. It assessed how firms monitor customer outcomes under Consumer Duty. The findings show that many firms rely on their data collection practices, including the metrics they collect and their management information (MI) practices to demonstrate good customer outcomes. But this isn’t, in and of itself, evidence that good customer outcomes are being achieved.

The regulator expects firms to show how they’re using that data to proactively demonstrate that they are producing good outcomes; to identify the risks that could lead to poor customer outcomes; or to identify any poor outcomes that have already occurred. The data also needs to show what the firm did in response, and whether those actions worked effectively to support customers.  

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Improving practices for general insurance firms 

Consumer Duty has been in force for three years (for open book products). But as a largely principles-based regulation, the sector – and the FCA itself – is still establishing what good looks like. Typical challenges are outlined below. 

Frameworks describe monitoring rather than proving good outcomes 

The FCA found that many firms had set out a broad definition of good consumer outcomes and a list of indicators, without explaining what good looks like at each stage of the journey, or how a given metric evidenced it. Some used operational measures, such as conversion rates or review completion as a proxy, but these metrics simply confirmed that the process ran, not how they affected the customer and their outcomes. 

Key actions for good practice 

Firms need to define good outcomes on a product-by-product basis, rather than providing one statement to cover all products. They could also describe what a customer should experience at the various key stages of the product lifecycle, for example, when joining, using the service, making a claim and leaving. Mapping those outcomes against customer journeys will help general insurance firms identify where poor outcomes, including those associated with customer vulnerability, are more likely to arise, and focus their monitoring and testing accordingly.  

Thresholds with no stated basis 

Some firms set thresholds for key measures that, individually or collectively, indicate good outcomes, for example for complaints, file review pass rates and client retention. But many couldn’t explain how they established the boundary between good and poor outcomes. 

Key actions for good practice 

General insurance firms can improve practices by recording the rationale for each trigger and tolerance, why the thresholds demonstrate good outcomes, and the harms they aim to detect. These thresholds, and their effectiveness, should be reviewed at least annually as part of formal product governance arrangements, and be revised as performance changes or if the measure is no longer appropriate to measure outcomes and identify risk.

No audit trail from information to improvement 

Some firms collected relevant MI but couldn’t show how it informed discussion, challenge and decision-making. Similarly, firms couldn’t demonstrate the link between the MI and how it informed actions, or how they measured the impact of those actions.  

Key actions for good practice 

Consumer Duty monitoring produces key outputs, which inform a firm’s next steps. Those actions create an audit trail, which general insurers and intermediaries should treat as a key deliverable.  

For example, one firm reviewed its data for rejected applicants to assess whether its distribution channels made sure products reached their target market. On finding that two paid affiliate channels were generating high volumes of unsuitable applicants, the firm ended those third-party relationships. The FCA doesn’t necessarily expect firms to go this far. Appropriate action will depend on individual circumstances, but clear rationale is essential. Crucially, in this example, the firm had documented every step, which reflects the level of granularity that the FCA wants to see.  

Remedies are agreed but never tested 

In some instances, firms identified issues but there wasn’t a follow-up to make sure agreed fixes were put into place and were effective. For example, the FCA found one firm that had identified live chat interactions that didn’t answer customer questions or left them unclear on next steps. That led to inconsistent first-contact resolution. As a result, the firm took actions to improve the customer experience, with clear requirements for ownership, escalation and training. However, later work showed that those actions hadn’t been fully addressed and there was no evidence that measures had worked. 

Key actions for good practice 

A new tool or process is not, in itself, evidence that consumer outcomes have improved. To track the impact of change, general insurance firms should define the improvement they aim to create, then measure the extent to which this is achieved. For example, one deposit taking firm aimed to fix delays to withdrawals caused by postal identity verification. It piloted a multi-bureau approach and recorded a 5% improvement in anti-money laundering pass rates and 20% in bank verification. The firm could show a targeted change, and evidence that the change had worked. 

Governance processes are described, but not put into practice 

Many firms set out details about committees, reporting lines and escalation routes under Consumer Duty but don’t show how issues escalate through management, or how a decision gets made. The same problem often applies to third-party oversight. 

Key actions for good practice 

To establish good practice, general insurance firms should define roles and responsibilities, and use a central tracker to monitor remediation of any issues. The tracker can consolidate items from risk events, product governance, committee discussions and file reviews, each with an owner, target date and status. Using MI triggers helps firms demonstrate that issues have been escalated, tracked and ultimately addressed.  

Boards review but don’t challenge 

Boards typically receive regular outcomes reporting and are described as central to oversight, but engagement often stops (or appears to stop) at reviewing and approving reports. This makes it hard for the FCA to see how boards use the outcomes reporting they receive to meaningfully inform and shape their decision-making.  

Key actions for good practice

Reporting outcomes through the year, using clear articulations of what good looks like, rather than as a single annual exercise, gives boards more timely and granular information to challenge and act on. Using structured MI and defined escalation triggers and thresholds helps boards spot where performance is slipping before it becomes a bigger issue. Where it does, general insurance firms can commission an action plan with named owners and track progress through later reporting cycles to show that the board's challenge led to real change.

Proportionality for smaller firms 

Smaller general insurance firms need to ensure they’re implementing Consumer Duty proportionately while maintaining the FCA’s expected standards. As such, they should focus on developing indicators such as complaints, customer feedback, missed service standards and file checks over complex systems. However, the firm must be able to explain what it shows, what it did and how effective the subsequent actions were.  

As an example of a proportionate, but effective approach: a smaller firm found routine queries were escalating into complaints because nobody owned the case. This was addressed through a weekly review allocating the queries to a named staff member to take further action. This reiterates the importance of results over methodology to demonstrate Consumer Duty compliance. 

Two gaps to address 

In addition to the above, two gaps stand out. The first is customers with characteristics of vulnerability. Identification has improved, and the FCA acknowledged better segmentation in its April 2026 review of year two Consumer Duty board reports. But firms also need to offer tailored support and show whether it was beneficial. This could be problematic because firms weren’t including the specific drivers of vulnerability in their MI, preventing them from creating bespoke support.  

The second gap is the quality of information manufacturers receive from distributors. In 2024, TR24/2 found that distributors were not producing enough MI to show how their activities affected a product's value to its target market. This was still the case in April 2026, and manufacturers should take action as they remain accountable for all customer outcomes. 

Where this sits in the FCA's supervisory agenda 

Consumer Duty is largely principles-based and the FCA is more concerned with good customer outcomes, than how firms achieved them. In practice, that means it’s taking a while for the sector to establish what good looks like, with a variety of supervisory work from the regulator, including:

• The July 2025 roadmap for retail insurance, which tested the FCA's own general insurance pricing remedies.
• The claims handling review, which found some insurers had limited control over delegated and outsourced claims handlers and firms promoting cash settlements without checking outcomes or vulnerability.
• Ongoing reviews under its Consumer Duty focus areas for 2025/26, each testing outcomes rather than firms' processes (of which three are now published). 

Despite the ongoing scrutiny, the FCA has consistently stressed the importance of outcomes over methodology and the need for proportionality. This was highlighted in CP26/23 which accepts that the Duty has been applied, in some cases, more intensively than intended, and proposes several remedies on scope and proportionality. They include adjusting the approach to outcomes monitoring, vulnerability support and board reporting, depending on a firm’s role in the distribution chain. This Consultation Paper also stresses that all parties within manufacturing, distribution and servicing chains need a clear understanding of their role in delivering a good customer outcome. This includes establishing what they need and expect from each other to achieve and prove this, ensuring these provisions are formally laid out. The final policy paper is still pending, so there could be future rule changes to support proportionality, while strengthening oversight in distribution. 

In addition to proportionality, the FCA is also looking at consumer understanding across the general insurance sector. Its good and poor practice publication in March 2026 found that firms weren’t testing communications enough and were treating sales volumes and low complaints as evidence of consumer understanding. On the back of this, and last year’s Which? super-complaint, the FCA is extending its work into home and travel insurance.

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What should firms do next? 

The review continues a common theme across the FCA’s feedback on Consumer Duty implementation – that data collection and process completion don’t equate to evidence of compliance. Taking a proportionate approach, firms need to document what constitutes ‘good outcomes’ throughout the lifecycle for each product and customer segment, including vulnerable customers. They also need to show how these are being achieved. General insurance manufacturers also need to look beyond their own activities to ensure that distributors and third parties understand their role and are aligned to deliver good outcomes. 

Key considerations to evidence the delivery of good consumer outcomes under the Consumer Duty include: 

• Tracing issues end to end to assess what the data showed, where it was challenged, what was decided, what changed and how the improvement was measured.
• Recording the basis for every MI metric threshold and why its setting is appropriate to distinguish between good outcomes and foreseeable harm.
• Defining the expected improvement, and how it will be measured, before a remedy goes live, and then testing whether the improvement has been effective.
• Segmenting vulnerability MI by driver, to assess whether tailored support was effective.

Together, these activities strengthen firms' oversight, evidencing of outcomes monitoring and their ability to demonstrate this to the FCA. 

For further information on Consumer Duty across the general insurance sector, contact Jon Sperrin.