Thematic Review on the Value for Money of Unit-Linked Life Insurance Products

For compliance and product governance teams, this signals a shift from process-based oversight to outcomes-based assessment — supervisors will expect firms to demonstrate, with evidence, that charges, underlying fund costs and product features are proportionate to the benefits delivered to identifiable target markets. Firms distributing or manufacturing unit-linked savings, investment bond and pension-style wrappers should anticipate proportionate scrutiny of their product approval processes, value assessment frameworks and management information on charges, fund performance and persistency. Practical steps include: mapping the product range against target market definitions; refreshing value-for-money assessments with documented benchmarking of charges and investment options; reviewing whether non-financial benefits (such as guarantees, tax wrappers or advisory support) justify cost; and ensuring distribution arrangements, including inducements and ongoing service charges, are transparent and defensible.

Boards and product governance committees should expect to document decisions and remediation plans where value is found to be lacking. Distributors and intermediaries should also brace for trickle-down due diligence requests from manufacturers seeking evidence on customer outcomes. Reputational risk is meaningful: adverse findings in this area typically feed into conduct reporting and can accelerate fee or product redesign.

Conversely, firms able to evidence robust value frameworks may gain competitive advantage in distributor selection and in tender processes. RegCanary recommends treating this letter as a supervisory expectation setter rather than a one-off information request, and aligning internal assurance, complaints analysis and consumer outcome metrics ahead of follow-up engagement.