MorganAsh has backed the Government’s Financial Inclusion Strategy, saying its focus on “financial resilience through insurance” is essential.
However, the firm warned that financial services companies must first understand customer vulnerability if they are to serve everyone properly.
The Government’s plan aims to increase access and remove barriers to create a financial system that works for all.
It includes initiatives around mental health, accessibility and economic abuse, aiming to improve financial resilience, especially for vulnerable and underserved people.
The strategy pointed out that protection and general insurance help households cope with financial shocks, but people who are vulnerable or on lower incomes are less likely to have the right cover.
MorganAsh said it supports the Government’s goal of closing these gaps, especially for contents insurance and income protection.
The company also welcomed calls for more support for victims of economic abuse, including those facing problems with joint life policies.
However, MorganAsh said that without proper systems and processes, firms risk not knowing who their vulnerable customers are, or if products and services are failing to meet their needs.
The company noted that without the right data, firms cannot offer personalised support and risk falling short of expectations under consumer duty.
Andrew Gething (pictured), managing director of MorganAsh, said: “It is positive to see that general insurance and protection are key considerations within the Government’s Financial Inclusion Strategy, recognising the sector’s essential role in building financial resilience.
“It make some very important points for all firms across financial services – and identifies key actions required to close gaps and increase access for all, whether that’s insurance, banking and affordable credit – or tackling problem debt and financial illiteracy.
“The strategy correctly identifies the significant protection gap, especially among those who are low earners or are vulnerable.”
Gething added: “Increasing inclusion can only start by understanding those currently being excluded and what the barriers of entry may be – whether it’s perception, understanding, trust or a lack of products or support.
“These deeper insights are only possible with the right technology and processes in place to properly segment a firm’s customer base, understand their circumstances and importantly, the outcomes they are receiving.”
The Chartered Insurance Institute (CII) is due to release guidance on vulnerability, with a focus on systems, processes, data and reporting.
The guide will give insurance and personal finance firms practical advice to meet the requirements of Consumer Duty and support vulnerable customers.
Gething said: “The upcoming guidance will support firms across insurance and personal finance to embed the values and principles of Consumer Duty and good vulnerability management.
“With these solid foundations in place, firms are then able to unlock the competitive advantage of Consumer Duty and the commercial benefits of personalising products and services – and supporting customers in a deeper, more meaningful way.
“Just as important is the role businesses can then play in supporting the government’s mission to drive social mobility and improve financial inclusion.”
