Allianz’s Holmes responds to FCA’s Gap insurance announcement

Allianz Holdings’ chief executive Colm Holmes has said he “commends” the FCA for calling out products that it thinks are not providing fair value following the regulator’s announcement on guaranteed asset protection (Gap) insurance.

On 9 February 2024, the FCA announced that 80% of the Gap market would be suspending sales after reaching an agreement with the regulator.

The regulator said it had identified concerns with the design of Gap insurance across all distribution channels and is requiring firms to make changes.

Speaking to Insurance Times, Holmes said Allianz did not write the product but was “very aware” of the situation.

“I would say the same thing for any product – all products should provide value for customers,” he added.

“If they don’t, I would always commend regulators to call that out, but they shouldn’t need to as we need to manage it ourselves.”

Consumer Duty

New regulations introduced by the FCA mean a service driven market centred around fair value is more important than ever.

For example, its Consumer Duty regulation, which was introduced last year (31 July 2023), sets out updated regulations that firms must follow.

Essentially, it requires insurance firms to review their products and services against a new standard of fairness.

Holmes said that Allianz was focused on “delivering the right things” for customers.

“Consumer Duty ensures insurers must focus on that and it is something that we very much welcome,” he continued.

“The bulk of the UK insurance market are looking to deliver good outcomes for customers and you’ve seen that in the market, where insurers are taking losses to try and manage the impact on people.”