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Consumer Duty: meeting expectations in 2026 and beyond
Since coming into force in 2023, the FCA’s Consumer Duty has reshaped how insurers design products, manage distribution and communicate with customers. What began as a regulatory milestone has increasingly become a test of culture, governance and an organisation’s ability to evidence good customer outcomes.
That was the focus of our recent Insurance Innovators webinar, hosted in association with Quadient, which brought together senior leaders from Markel, Markerstudy, Direct Line Group and Quadient to reflect on progress so far – and what lies ahead as the FCA prepares to consult on changes to Consumer Duty in 2026.
From implementation to embedding
Two years on, most insurers have moved beyond initial implementation. However, as the panel discussed, embedding Consumer Duty into everyday decision-making remains a longer journey.
While governance frameworks have matured, accountability for customer outcomes is still uneven in practice, particularly where responsibility spans multiple teams or third-party providers. The panel also noted that early investment hasn’t always translated into meaningful change, with some improvements delivering real impact and others remaining largely superficial.
Evidence, value and distribution challenges
Evidencing good outcomes remains a key challenge. Firms continue to face FCA scrutiny around fair value across customer cohorts, oversight of distribution chains and persistent data gaps.
Reassessing products already in market has proven especially difficult, often exposing limitations in legacy systems and historic product design decisions. Against this backdrop, the FCA’s planned consultation in 2026 was viewed as a natural evolution of Consumer Duty — one that will raise expectations around data, proportionality and ongoing monitoring rather than fundamentally changing direction.
Commercial decisions and customer trust
The discussion also highlighted the difficult commercial decisions prompted by Consumer Duty. In some cases, insurers have had to change pricing, restructure products or invest more heavily in oversight and controls.
While challenging, these decisions were seen as opportunities to strengthen customer trust and loyalty. Dashboards that bring together product, servicing and outcome data are helping firms monitor progress more effectively, while colleague feedback provides valuable insight into how customers actually experience products and services.
Operationalising Consumer Duty
Smarter communications, better data and continuous monitoring were identified as critical to operationalising Consumer Duty at scale. Clear, personalised and accessible communications are increasingly viewed as a compliance lever, not just a customer experience consideration.
Simplifying language, testing whether messages land as intended and designing communications around real customer needs — particularly for vulnerable or digitally excluded customers — remain areas of focus across the market.
The role of technology and AI
Technology also featured prominently, with AI, automation and analytics playing a growing role in understanding customer journeys and identifying potential risks. Tools such as voice analytics can surface vulnerability indicators, while outcome testing supports more proactive oversight.
However, the panel stressed that technology must be paired with meaningful cultural change. Aligning KPIs and incentives with customer outcomes — and giving teams the flexibility to act in customers’ best interests — is essential to avoid a tick-box approach.
Looking ahead
As Consumer Duty continues to evolve, insurers that focus on building core capabilities — integrated data, effective communication frameworks and strong supplier oversight — will be best placed to meet both regulatory expectations and customer needs.
With the FCA’s 2026 consultation on the horizon, the message from the panel was clear: Consumer Duty is no longer a one-off programme, but an ongoing discipline that will continue to shape the future of insurance.
Check out the full webinar for more!
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