The Financial Conduct Authority (FCA) has warned that many insurers and brokers are failing to show how they are providing fair value to customers.

As the UK financial watchdog publishes a report setting out issues with information sharing between insurers and brokers, the regulator said that while these organisations have improved governance and oversight of how products are designed, managed, reviewed and distributed, there are some that are still not providing consumers with regular good outcomes.

The FCA's comments follow a pause in the sale of guaranteed asset protection (GAP) insurance at the majority of UK firms selling the product after the authority raised concerns that they were not offering fair value.

Speaking about its latest findings, FCA director of insurance Matt Brewis said: "Progress is being made, but we are still seeing too many examples of insurers and brokers lacking the right information, governance, or oversight to ensure their customers get consistently good outcomes."

Brewis went on to say that insurance firms should acknowledge the organisation's findings and make improvements where necessary, with firms continuing to provide poor value to customers risking regulatory action from the authority.

In February, 80 per cent of UK insurers selling GAP agreed to pause sales of the product.

GAP insurance, typically sold alongside car finance, covers the difference between a vehicle’s purchase price or outstanding finance and its current market value in the event it is written off before finance has been repaid.

The move came after the watchdog found that only six per cent of the amount customers pay in premiums for GAP insurance is paid out in claims.

The FCA had also seen examples of some firms paying out 70 per cent of the value of insurance premiums in commission to parties involved in selling GAP policies.

In May, it was confirmed that the FCA permitted several GAP insurers to recommence sales following changes to their products.

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