Our product oversight and governance processes have been updated. Embracing the value–focussed regulatory developments, our product value assessment activity now requires completion every 12 months as opposed to the previous review timelines.
Allianz Assistance Product Oversight
and Governance Statement
The Financial Conduct Authority (FCA) has considerably increased its focus on product value, and as a result, implemented successive regulatory requirements. These requirements apply to both manufacturers and distributors of insurance products and for both commercial and personal lines of business. The requirements place the onus on brokers’ and insurers’ internal operations and controls to ensure that the industry as a whole works towards providing customers with products and services that deliver fair value.
The Allianz Assistance approach to the Product Oversight and Governance Rules
Has Allianz Assistance carried out a PROD assessment on each available product?
We undertake the product assessment and monitoring activity in accordance with the FCA’s requirements. Our product oversight and governance processes have been amended to ensure we’re aligned to the updated PROD (Product Intervention and Product Governance) Sourcebook requirements, which came into effect on 1 October 2021.
Is Allianz Assistance a product manufacturer for the products available?
We typically administer policies by our manufacturer AWP P&C SA (who underwrite our policies).
Have we assessed the details of the target market and intended value of each product?
Yes, we review each product to:
- Understand the insurance products we offer.
- Determine the identified target market for the insurance products.
- Identify any customer segment for whom the insurance product is not compatible, particularly in relation to their needs, characteristics and objectives.
- Carry our distribution activities for the relevant insurance products with the customer’s best interests at heart.
This is also outlined in our internal product and consumer protection policies.
How do we assess fair value of our products?
We conduct a detailed review covering the FCA PROD 4 requirements. These include, but are not limited to:
Product performance:
- Claims frequency
- Claims acceptance
- Claims rejections
- Claims walkaways
- Complaints
Price:
- Loss ratio
- Commission levels
- Pricing models
- Risk profile depreciation
Distribution:
- Ensuring that the distribution model is in the consumer’s best interest
Governance due diligence:
- Product approval process
- Product testing
Product monitoring:
- Customer journey
- Customer understanding (policy terms and conditions)
- Market analysis
- Customer feedback
- Benchmarking
Target market statements
Whilst our products have been assessed at an overall level, there may be certain products and schemes which have been tailored and assessed for specific partners. If you have any queries about a potential specific scheme and the products contained therein, feel free to enquire about the individual results of our fair value assessment by reaching out to your Allianz Assistance contact.
Product Lines
We offer a range of travel insurance products and while we have assessed these individually, we have provided a collated statement below:
Customer type: Individuals or groups of individuals.
Customer characteristics: All travellers who book travel in advance and need protection for pre-paid trip expenses and cancellation penalties.
Customer objectives: Obtain basic protection against losing money spent on travel and against unexpected out-of-pocket expenses due to covered unexpected and unforeseen events before and during travel.
Risks: Restrictive exclusions and limits might apply, mitigated by clear terms and conditions and notification / disclaimer throughout sales journey. General policy exclusions were specifically designed to only exclude situations that are within the insured’s control, have inherently high-risk levels, or present unacceptable high potential for accumulation of risk. These exclusions follow Allianz standards and local regulations and have been reviewed and approved by local legal teams. Use of these exclusions in the policy allows Allianz Assistance to offer valuable comprehensive coverage to consumers at optimal prices by controlling the exposure to low-frequency, but high-severity risks. Insureds may believe medical expenses are covered when travelling in the country (FCA signposting regarding pre-existing medical conditions in effect).
Potential negative target market (customers who mustn’t be offered this product): Not to be used for any foreseeable (known at the time the policy is purchased) risk and not covering risks in travel ban destinations. Based on local product specifications, age limits or certain pre-existing medical conditions or other conditions might exclude certain customer groups. For UK residents only.
Consumer market research and competition analysis were used to ensure that products reflect the market needs. Internal historic data analysis of existing products is used to confirm the importance that consumers and business partners place on particular covers and covered events.
Customer type: Individuals or groups of individuals.
Customer characteristics: All event attendees who book event tickets in advance and need protection for pre-paid ticket costs and cancellation penalties.
Customer objectives: Obtain protection against losing money spent on event tickets due to covered unexpected and unforeseen events that may force them to miss the event.
Risks: Restrictive exclusions and limits might apply, mitigated by clear terms and conditions and notification / disclaimer throughout sales journey. General policy exclusions were specifically designed to only exclude situations that are within the insured’s control, have inherently high-risk levels, or present unacceptable high potential for accumulation of risk. These exclusions follow Allianz standards and local regulations and have been reviewed and approved by local legal teams. Use of these exclusions in the policy allows Allianz Assistance to offer valuable comprehensive coverage to consumers at optimal prices by controlling the exposure to low-frequency, but high-severity risks.
Potential negative target market (customers who mustn’t be offered this product): Not to be used for any foreseeable (known at the time the policy is purchased) risk and not covering risks in travel ban destinations. Based on local product specifications, age limits or certain specific conditions might exclude certain customer groups. For UK residents only.
Consumer market research and competition analysis were used to ensure that products reflect the market needs. Internal historic data analysis of existing products is used to confirm the importance that consumers and business partners place on particular covers and covered events.
Customer type: Individual customers over 18 years of age.
Customer characteristics: Customers who own, purchase, lease, rent, drive or use a passenger car (including electric vehicle), light commercial vehicle or motorcycle.
Customer objectives and needs: Need for technical breakdown and accident assistance.
Inherent risks: Cannot cover those under 18 years old and who are not UK residents. Cannot cover all vehicle types.
Potential negative target market (customers who mustn't be offered this product): Customers who already have a passenger car (including electric vehicle), light commercial vehicle or motorcycle assistance with the same coverage (same events, same benefits). Customers under 18 years of age. Customers cannot be motor traders, garages, businesses or individuals dealing in the buying and selling or repair of motor vehicles.
Alliance Assistance internally developed its own customer lab with a dedicated team which provides us with deep knowledge about customers’ mobility needs. Customer interviews were used to provide us with confirmation of the suitability of our existing product features.
We offer a range of automotive warranty products and while we have assessed these individually, we have provided a collated statement below.
Customer type: Individual customers (private vehicle owners) owning a vehicle, new or used.
Customer objectives and needs: Cover the costs of repairs in case of a breakdown affecting the functionality of the vehicle. To prevent loss of vehicles’ value.
Inherent risks: Possible misunderstanding of the cover by the customer, especially in the case of full cover. In that sense, all wordings were revised to ensure clarity and non-contradictory language used to maximise customer understanding full.
Potential negative target market (customers who mustn't be offered this product): Customers below 18 years of age and who are not UK residents. Customers who own vehicles for specific usage: driving schools, buses, off-road vehicles, competition vehicles, agricultural vehicles and machine vehicles. Other exclusions apply such as salvaged vehicles, value and mileage restrictions and vehicles that have been modified without approval.
General exclusions: Wear and tear parts. Maintenance costs. Damages to the chassis and body (scratches, dents, paint damage, corrosion). Damages resulting from improper use of the vehicle. Damages caused by traffic accidents.
Product appropriateness and testing:
- Product is consistently revised to ensure best response to customer needs
- Product is to be adjusted based on actual experience from running programmes.
Customer type: Individual customer
Customer objectives and needs: Customers wishing to cover the cost of repairing or replacing the home appliance in case of internal breakdown occurring after the manufacturer’s warranty period which is affecting its usability and safety.
Inherent risks: Extended Warranty product does not cover cosmetic damage. Allianz Assistance only covers breakdown if it stops the normal functioning of the insured appliance. In case of scratch or dent, and the insured good still works as expected, Allianz Assistance will not compensate. Extended Warranty products can also cover theft events (burglary, pickpocketing on certain grey portable goods) however the loss is not covered.
Potential negative target market (customers who mustn't be offered this product): Customers below 18 years old and who are not UK residents.
Allianz Assistance extended warranty product is regularly tested against industry standards: in 2020 a European benchmark exercise was performed on +35 programmes dealing with the content of the market product (benefits, events, exclusions) and pricing in order to confirm the adaptation to market standards and customer needs.
Customer type: Individual customer
Customer objectives and needs: Customers wishing to cover the cost of repairing or replacing a mobile device in case of damage affecting its usability and safety.
Inherent risks: Accidental Damage product does not cover cosmetic damage. Allianz Assistance only covers damage if it stops the normal functioning of the insured mobile device. In case of scratch or dent, and the insured device still works as expected, Allianz Assistance will not compensate. Accidental Damage products can also cover theft events (burglary, pickpocketing) however loss is not covered.
Potential negative target market (customers who mustn't be offered this product): Customers below 18 years old and who are not UK residents.
Allianz Assistance Accidental Damage product is regularly tested against industry standards: in 2020 a European benchmark exercise was performed on +50 programmes dealing with the content of the market product (benefits, events, exclusions) and pricing in order to confirm the adaptation to market standards and customer needs.
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