October 1 marks the first anniversary of the introduction of the European-wide legislation, and the specialist insurer sought the views of 250 UK brokers to understand its impact on the industry.
Almost two-thirds of brokers (63%) believe the IDD has been good for the insurance industry, with the figure rising to 72% of national brokers.
The IDD was introduced to improve the level of consumer protection in the market and is focused on customers being better informed and firms providing products which meet their needs.
It also introduced new rules on product governance and a requirement that all firms act honestly, fairly and professionally in the customers’ best interests throughout the distribution process, including the marketing, remuneration and the sales of products.
The legislation’s most successful achievement, according to 61% of brokers, is that customers are better informed about the products they’re buying. Over half (54%) also agree that it has led to fairer outcomes.
Over half of brokers (56%) also think that the IDD has helped to raise professional standards, with this figure increasing to 70% among larger regional brokers. In contrast, only 26% of brokers believe that IDD has successfully increased trust in the insurance industry.
Research by Ecclesiastical ahead of the introduction of IDD in October 2018 found that many brokers felt unprepared for the changes and were concerned about the growing burden of legislation.
A year on however and the majority of brokers admit that the IDD has not had the impact on their business that they feared. Just 6% said the IDD has had a negative impact, with extra administration and bureaucracy the main concern.
Adrian Saunders, Commercial Director for Ecclesiastical Insurance, said: “A year on from the introduction of the IDD and its good to see that many brokers are feeling positive about the changes. At Ecclesiastical, we’re passionate about doing the right thing for our customers so I’m particularly pleased that brokers feel that customers are better informed and are getting fairer outcomes as a result of the legislation. Trust however still remains a major issue in our industry, as our findings show.”