From Consumer Duty compliance to cultural change at Allianz

Problem

When the Financial Conduct Authority (FCA) introduced the new Consumer Duty regulations in 2021–2022, it indicated to financial firms with retail or SME products they needed to start using more behavioural science. The FCA wanted to ensure customers understood the potential outcomes of each product, and ensure they received those outcomes, insisting that companies be aware of their customers’ behavioural biases and avoid exploiting them, even by accident.

With the exception of a few major retail banks, only a few firms have in-house behavioural research teams. This was the case for the world’s largest insurance company, Allianz. It wasn’t enough to effectively address their obligations to the FCA Consumer Duty; the team also needed a grounding in behavioural science so insights could be implemented successfully to the benefit of their customers.

Solution

The aim of the FCA wasn’t just for firms to test their products and communications, but also to change internal culture. Irrational Agency developed and built a set of research methods and tools to address the FCA obligations and, in parallel, delivered intensive training to Allianz’s staff, covering behavioural biases and document design for better internal comprehension and to facilitate this cultural change.

The first stage of testing was an expert-led behavioural science audit of processes and documentation, which led to extensive bespoke comprehension testing. A particular challenge for financial documentation is understanding comprehension for important longer documents, such as policy wordings and terms and conditions. To address this, we developed a new and bespoke navigation test to explore how customers react to these longer documents. The learning from the audits and tests informed the design update of multiple documents, and we further expanded the comprehension and navigation tools with A/B testing to compare reactions to two versions of the same document and establish how the changes improved each document.

Finally, to help change culture, embed good practice and build expertise, Irrational Agency created a set of training workshops. These provided the Allianz teams with a fundamental grounding in behavioural science and Consumer Duty, as well as strategies for effective future communications. The workshops were designed to provide training for employees involved in creating the documents and to improve their behavioural communications capabilities. We also contributed to claims-handler training, creating a bias element with real examples from the behavioural audit. This training was designed to remove as many biases as possible in the communications between hundreds of claims handlers and Allianz customers.

Impact

The Irrational Agency approach helped Allianz meet their FCA obligations on time, providing a detailed evidence-based approach and a demonstrable improvement in customer outcomes through better comprehension. The learning framework for best-practice communications also created a cultural shift towards getting things right for the customer first time.

“Irrational met the challenge head-on and pulled out all the stops to meet an incredibly tight turnaround to become trusted business partners across the business. The work to meet the FCA deadline impacted over 2,000 customer-facing documents. And the embedding of best-practice approaches for our communication documents has had a positive impact on how we communicate with our customers.”

Becky Swarbrick, project lead at Allianz

“Irrational’s experience of working with the FCA and their expertise in behavioural economics was invaluable to us in the early stages of the Consumer Duty programme. It meant we could go full steam ahead with the confidence that we were doing the right thing. And whilst we were trying to find our way around the new regulatory requirements, Irrational were fantastically flexible and accommodating. And they’re also a really nice bunch of people to work with!”

 

Ingrid Wienholts, Head of Insights and CX at Allianz

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