The regulator will prioritise access to insurance, improving consumer understanding and service quality in the insurance market, it has said.
The Financial Conduct Authority (FCA) released the first of its nine regulatory priorities for the year and the work it will be undertaking.
The regulator will publish reports for the mortgage sector in March, as well as investments, pensions, wholesale, payments, consumer finance and retail banking.
The FCA said each report would help firms to understand what is expected, strengthen compliance, support innovation and deliver better outcomes for consumers.
It said firms should consider which priorities and recommendations apply to them and whether they have business lines that could fall under other sectors that the FCA is prioritising.
The FCA said too many consumers had poor experiences when making an insurance claim, and firms should comply with Consumer Duty where applicable, communicate clearly with consumers so they understand their cover and receive good outcomes when claiming. It also said firms should respond quickly, fairly and transparently to claims and queries, and monitor that their products and services match what has been promised to consumers.
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It said it would support growth and innovation in the sector, allowing firms to invest in technology, develop products and manage new risks. This may be done with artificial intelligence (AI) and new technology, but the regulator recommended that firms test ideas in its AI Lab.
The FCA will continue to review its rules and lessen requirements on firms to simplify regulation.
The regulator said: “These are our main focus areas this year. We will continue to monitor risks and opportunities through data, market intelligence and engagement with industry. We will pause or stop work if we need to look at urgent new issues.
“Underpinning our approach, we will continue our work to ensure the Consumer Duty is integral to how regulated financial firms treat their consumers. This will increase consumers’ confidence when seeking products and services that meet their needs and match their capacity for risk.
“As we progress with our work, we will ensure that we take the most appropriate and proportionate action. Where we identify serious misconduct, we’ll consider the tools available to us, including supervisory intervention or enforcement.”