At the end of March, the Financial Ombudsman Service (FOS) published their plans and budget for the next 12 months and onwards. Today we will look at what this means for the regulatory body and us as insurance providers.
As you can imagine, the last 12 to 18 months has had a big impact on complaints received through the insurance industry, a lot of consumers and businesses have depended on insurance cover that didn’t exist on their insurance policies and as you can imagine this has had a bearing on the ombudsman. This plan and budget, however, was actually consulted on in December 2019 to January 2020, so therefore the real impact COVID has had on the insurance industries complaints is yet to be clear, but it is predicted to be around another 170,000 new cases in the year ahead.
The FOS’ strategic priorities for this period are to proactively engage with stakeholders to assist in the prevention of complaints, enhancing its service by bringing down wait times and improve diversity and promote sustainability by looking at new and approved methods to improve internally and therefore become more efficient. All these points are detailed thoroughly within the report.
The budget the FOS has set themselves for the year ahead is £260 million, which is an increase in the previous year. The largest cost with just over 50% of the budget, is staff and as such and in line with FOS’ strategic priorities, they are looking to lower that aspect of their budget, with an expected reduction in staffing over the next 12 months.
To support this budget increase, there is a compulsory jurisdiction levy increase of £12 million to £96 million, together with a case fee increase of £100 to £750. This will have a knock-on effect for all financial services that fund the FOS. The FCA has already released their own Amendments to the Fees manual, with increases apparent.
We at Protectivity strive to diversify in a hard market, trying to bring our brokers more options for their customers, without losing the confidence of our marketplace, for example by ensuring we do not place business with unsavoury insurers. To support this strategy, we will soon be releasing a therapy product, created by Protectivity and supported by an A- Standard and Poors rated UK insurer.
This product which caters for the specialist therapists’ market, recognises over 250 trades, everything from Acupressure and Counselling to Reiki and Holistic therapy, we can cater for these specialist considerations and premiums start for as little as £50, cover can include Professional Liability, Business Equipment and Personal Accident.
The insured must be an individual or a sole trader and is effectively operating freelance and cover excludes the administration of drugs and abuse coverage, there are also market standard considerations like the use of proprietary brands and suitable checks for providing treatment to minors.
For more information, please contact your account handler here at Protectivity, they will be more than happy to assist.