FCA challenges industry to improve access to insurance for people with pre-existing medical conditions

The FCA is concerned that consumers find it difficult to access the specialist travel insurance market. As a result, the FCA will work with key industry stakeholders to create a new service which will redirect customers to specialist providers.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:

“People with pre-existing medical conditions feel poorly served by travel insurance. There are specialist services out there, but, often, people don’t know where to find them. We’ll work with industry to point people in the right direction and help dispel some of the myths and misunderstandings to ensure this market works better.

“This will also form part of our continuing our work on insurance pricing practices which are designed to lead to long-term positive changes across the market.”

In June 2017 the FCA issued its Call for Input to gather more evidence and decide how best to address concerns about people with pre-existing medical conditions obtaining affordable travel insurance. In the UK at least 15 million people are currently living with at least one long-term health condition. This number is predicted to rise to 18 million over the next decade.

The CfI prompted a high level of interest including responses from individual consumers, with many writing about their personal experiences. Most stakeholders felt that it could be difficult for consumers who have, or have had, pre-existing medical conditions to find affordable travel insurance.

A number of themes emerged from the responses including:

• There is a lack of quality information on alternative options available to consumers after they had received a high quote or had been refused cover, which can cause consumers to assume that they are uninsurable. 
• A general lack of understanding amongst consumers and firms around insurance terms and the risk factors that are considered by providers when calculating the premium.
• The lack of transparency around pricing, the risk factors which drive quotes and how premiums are calculated which limits consumers’ awareness about their options and can mean that they have difficulties in finding competitive insurance that is appropriate for their medical condition.

The findings of the CfI will also be used to inform the FCA’s wider work on insurance pricing practices, as announced in the Business Plan for 2018/19.

Notes to editors

1. Feedback statement[1]
2. Call for input[2] (PDF)
3. Financial lives[3]
4. On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
5. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
6. Find out more information about the FCA[4].