FCA Business Plan 2015/16

Published by Kim Durniat on

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  • Kim Durniat

    Kim Durniat

    Partner and Head of Life Consulting

  • Ciara Russell contributed to the writing of this blog post.

    Last week, the Financial Conduct Authority (FCA) published its business plan for the year 2015/16.  The plan covers:

    • Risk outlook (previously a separate document)
    • FCA strategy
    • FCA’s key priorities
    • Ongoing activities and deliverables
    • How the FCA operates

    In this blog, we summarise the risk outlook, how the insurance sector is impacted by the FCA’s upcoming activities and look at relevant market studies.

    Risk outlook

    The business plan discusses some key areas of risk for the financial services market. These are summarised below:

    Category Risks
    Business Conduct

    Firm's culture

    Consumer behaviours

    Conflicts of interest, with a focus on wholesale markets

    Financial crime

    Unfair contract terms

    Policy, legislation and regulation

    EU and international

    Market infrastructure


    Shadow banking

    Domestic policy

    Pension reforms

    Consumer credit

    Economic and market trends Trends in growth, interest rates and inflation
    Social factors

    The ageing population and older consumers

    Young consumers

    Technological challenges

    Innovation in online and web-based channels


    Complex systems and intermediaries and/or gatekeepers

    Failure to invest and maintain

    Market resilience

    Key priorities

    The FCA key priorities that are applicable to the insurance sector are:

    • Role of Appointed Representatives – The FCA will review the role of Appointed Representatives in the distribution of general insurance products and in particular, if there are adequate and robust systems, controls and resources to effectively select and oversee Appointed Representatives.
    • Technology and use of Big Data – A market study will be conducted to investigate how insurance firms use Big Data or other unconventional data sources. The FCA will consider potential risks and benefits and ensure regulations do not unduly constrain beneficial innovation in this area.
    • General insurance add-ons – The FCA plan to address issues found in a 2014 market study. These include banning ‘opt-out’ selling across all products sold by an authorised firm and issuing guidance to improve the way add-ons are sold on price comparison websites.

    Current and planned market studies and thematic work

    Studies applicable to the insurance sector are:

    Sector Review                                                                       Start date End date        
    Cross sector

    Visibility of IT resilience and risks at Board Level     

    Performance management of staff

    Culture review

    Q1 2014

    Q4 2014


    Q2 2015    

    Q3 2015


    General insurance and protection

    Commercial claims by SME customers

    Distribution chains

    Role of Appointed Representatives

    Technology: use of Big Data and access market study

    Q3 2014

    Q3 2014


    Post April 2016

    Q2 2015




    You can read the FCA’s business plan in full here: http://www.fca.org.uk/static/channel-page/business-plan/business-plan-2015-16.html

    Key takeaways

    • Technological risks continue to feature on the FCA’s radar as can be seen in their risk outlook, priorities and market studies.
    • Appointed Representatives for general insurance firms are a key priority.