The purpose of a Target Market and Fair Value Statement is to explain the identified target market and the expected distribution strategy for each AXA Retail Insurance product manufactured by AXA Insurance.
It also outlines our approach to Product Oversight and Governance to demonstrate how we design, monitor and review our products to ensure they continue to provide fair value and meet the needs, characteristics and objectives of the target market including vulnerable customers.
AXA UK’s Product Governance Policy sets out the standards that AXA Retail is required to implement to ensure the achievement of fair value and good customer outcomes by having robust product oversight and governance arrangements, systems, policies and procedures in place, which encourage a business culture with customers’ interests at its core.
These requirements are in place in order to ensure that all AXA UK customers receive fair value and that good customer outcomes are delivered in line with AXA UK’s defined customer outcome statements.
Target Market Statements provide information about all of the AXA Insurance products distributed. This includes:
Our Fair Value Assessments consider the performance of our products against a number of areas including:
As part of our Product Governance and Oversight of AXA Retail products:
Yes, as part of our product approval process, we consider any expected changes to the total price a customer would likely pay during the period they hold the product, in addition to the relationship between the total price and the value received for subsequent renewals.
We will take appropriate action to stop any further harm from occurring and inform all our impacted distribution partners and customers about the remedial action being taken. This could include, but is not limited to:
Please refer to our Target Market and Product Fair Value Statements, which provide information about our products including:
On an annual basis we'll be requesting data from our distribution partners to allow us to assess if the arrangements in place remain appropriate and represent value for the customer. At a minimum the information we'll require to carry out our assessments in accordance with the FCA's PROD rules is:
AXA Retail wrote to its broker community in September 2021 to let them know about the steps we are taking to oversee our products, so that we can ensure they deliver fair value for customers. We also outlined the part our broker partners must play, by providing information to enable us to complete our annual Fair Value Assessments, as required by the FCA's enhanced rules which came into force on 1 October last year.
Brokers who have a relationship with AXA Commercial and AXA Health will receive a separate assessment from them.
Some trade bodies have collaborated to create a template. We are not using this template because it did not meet all of our information needs and it is a very manual way to collect the data. AXA Retail has reconciled this against our own approach and where appropriate we have tried to align our own assessment with this template.
As the product manufacturer, we need to ensure we have a full view of the services provided across the chain, and the cost of these to the end customer. It is important that as part of this we understand how fees contribute to the end price, so that we can assess if our product delivers fair value, as required by the FCA's rules. Brokers have equal responsibilities as distributors to understand the value of the chains they use to sell the product.
In order for AXA to complete its internal assessments we would appreciate where possible brokers keeping to the original submission date but understand there could be extenuating circumstances preventing them from doing this. If that happens please raise it with your relationship manager and we will need to consider it on a case by case basis.
AXA Retail needs a clear understanding of the distribution process. The broker partners who we have a direct relationship with are required to provide information about services, remuneration, controls, and information about any other parties in the distribution chain. It's important that product manufacturers and distributors work together to ensure that customers receive fair value from the goods and services they purchase and achieve the right outcomes at every point of their journey, regardless of who they're interacting with.
Once we have received a full response, AXA Retail will review this and let the broker know if there are any further questions, or any next steps.
AXA Retail must ensure that our products are delivering fair value to end customers. This means working closely with all of our broker partners and obtaining more information from them than we have previously, about the remuneration they receive and what they do for customers in return for this. The information we have requested is in line with the requirements set out by the FCA in their PROD rules. This does not require insurers to obtain details of any separate commercial agreements between distributors and other firms, which are paid by the distributor (rather than being included separately in the premium) or a breakdown of the distributor’s costs or profit margins.
AXA has designed the process to be clear, as straightforward and as light touch as possible for brokers. Completing our survey also enables the data collection to be automated in the back end which will help us in terms of comparison purposes so we would really appreciate if you could spend a short amount of time to follow our preferred solution. If that is not possible then please speak to your relationship manager in the first instance and we will try and work with you on a solution.
Where a broker does not respond, their Relationship Manager will reach out to try and understand the reasons why and offer guidance and support to enable completion of the questionnaire. It's important AXA Retail understands the role each broker plays in distributing the product as that information forms an integral part in helping us to complete our fair value assessment.
We know that our broker partners need to understand the value of our products, the target market, and how this impacts their distribution strategies. A lot of this information is already included in the Target Market Statements for our products, which can be downloaded above. If AXA Retail make any changes to a product based on the outcome of our fair value assessment, we will notify brokers and our Target Market Statements will be updated to reflect these.
AXA Retail plan to communicate its findings as soon as we have received a reasonable sample size of responses on our questionnaire. This will be before the deadline to allow you to consider your own regulatory responsibilities relating to our products.
Due to the number of products and different arrangements we have at AXA Retail, we cannot accommodate ad hoc requests for individual brokers at this time. The process we have designed, including the play back of our review, combined with the GI Value measures to be published by the FCA should be everything you need to conclude if our product is providing value to our customers.