How we calculate our ratings
Customer experience ratings
Our unique Customer Experience Ratings help consumers find companies that offer a good service.
We only rate brands which have at least some direct-to-consumer products, including those sold through comparison sites.
Fairer Finance Customer Experience Ratings are published twice a year – once in the spring, and once in the autumn.
Why we developed our ratings
The way that consumers buy financial products has changed over the past two decades. The growth of comparison sites has led to many more customers making their own choices when it comes to financial products, rather than taking advice.
Customers are now looking for shortcuts to make better decisions. Comparison sites have made it easy for customers to compare prices - but it's important that they can also compare products and brands on quality and service.
Customer Experience Ratings: our criteria
There are four key metrics we use in our Customer Experience Ratings.
- How happy are a firm’s customers?
- How much do customers trust the firm?
- How good is the provider at handling complaints?
- How transparent is the provider?
However, in life insurance we don’t poll customer happiness and trust. Instead, we ask:
- What percentage of life insurance claims are paid?
Each of these criteria is expressed as a percentage. We then work out the mean average of the four scores, which gives the overall percentage score for our Customer Experience Ratings.
How we gather data for these ratings
Happiness and trust
We use consumer polling to measure happiness and trust. Polling is conducted by independent polling company Opinium, using their nationally representative panel.
We receive tens of thousands of responses from these surveys every six months. These responses are analysed to provide a happiness and a trust score for each brand in our ratings.
To see how good financial firms are at handling complaints, we use data published by the Financial Ombudsman Service (FOS). The fewer the complaints upheld in the customer’s favour at the FOS, the better the complaints performance of the company. We weight the most recent FOS data against data from previous periods to work out complaints scores for each six-month period.
To see how transparent brands, we conduct our own analysis of purchase journeys and related terms and conditions or policy documents.
When analysing at a brand’s purchase journey, we check whether the key product information is provided – and how clearly explained and signposted this information is.
With product documents, we assess the clarity of the document’s design and language.
The purchase journey makes up 75% of the overall transparency score, with document analysis making up the other 25%.
Claims paid (life insurance only)
Providers publish ‘claims paid’ as a percentage every year.
We weight the most recent data against data from previous years. And then use further calculations to create our ‘claims paid’ percentage and the overall score in our Customer Experience Ratings.
If you want to take a more in-depth look at exactly how these scores are calculated, take a look at the PDF at the bottom of this page.
Once these key indicators have been analysed, and a Customer Experience Rating awarded, we apply further calculations to award Fairer Finance Ribbons.
We calculate the normal distribution of scores providers receive in each product area. This calculates where providers’ scores sit in relation to the product area average in terms of standard deviation.
Companies that receive a normal distribution score of 0.8 or above receive a Fairer Finance Gold Ribbon.
Those that receive a score between 0.7 and 0.8 receive a Fairer Finance Silver Ribbon. And those that receive a score between 0.6 and 0.7 receive a Fairer Finance Bronze Ribbon.
All other scores are not awarded a Fairer Finance Ribbon.
What our Customer Experience Ratings mean
Brands that receive a Fairer Finance Gold Ribbon have performed better for customer experience than 80% of the market. They tend to excel at handling complaints, and at explaining the key features of the product in their documents and product journeys. They also tend to have the happiest and most trusting customers.
Brands that are awarded a Fairer Finance Silver Ribbon have performed better than 70% of the market. They tend to have a strong record of handling complaints, and do a great job of explaining the key features of the product. They also tend to have happy and trusting customers.
Brands that are awarded a Fairer Finance Bronze Ribbon have performed better than 60% of the market. They tend to have a good record of handling complaints, and do a good job of explaining the key features of the product. They also tend to have fairly happy and trusting customers.
If you’d like to discuss using product endorsements on your marketing material - or find out more about out methodology, please email email@example.com.
Want the full information on how our Customer Experience Ratings are calculated?
Take a quick look at how our Customer Experience and Product Ratings differ
Our unique Product Ratings are mostly designed to help customers compare financial products on quality.
We rate products from one to five stars, depending on the specific features included as standard.
In some sectors, such as credit cards, banking and investment platforms, our ratings are more focused on providing a simpler way to understand the cost and benefits of a product. For example, investment platforms have numerous different charges that are applied in different ways. Our ratings use scenarios to calculate which platforms offer the lowest costs overall, and also penalise companies for having high ancillary charges - such as fees for transferring your investments to another provider.
Why we developed our ratings
The way that consumers buy financial products has changed over the past two decades. The growth of comparison sites has seen many more customers making their own choices when it comes to banking and insurance products, rather than taking advice.
In such an environment, customers are looking for shortcuts to make better decisions. Comparison sites have made it easier for customers to compare prices - but it's important that people can also compare products and brands on quality and service.
Our ratings are designed to help customers make more informed decisions, but they should not be taken as recommendations or advice. Every customer has different needs, and our ratings are simply designed as a short cut to help consumers make sense of the complex world of financial products.
How we formed our core criteria
We compiled a comprehensive database of key product features for thousands of direct-to-consumer products in the sectors we rate.
We then selected the most important features for each sector - based on our expertise, claims data, industry feedback, and customer research. These product features formed the basis of our ‘Red Line Requirements' - which must be satisfied for a product to qualify for a five star rating.
To see our Red Line Requirements for the products we rate, take a look at the PDFs at the bottom of this page.
How we collect data
We collect data by conducting analyses of product documents and by mystery shopping. We do not rely on information provided by companies. Instead, we carry out an ongoing live checking schedule to ensure our data is accurate and up to date.
However, we do invite companies to let us know about upcoming changes to their products, or if new products are being launched. We’ll then conduct our own fact-checking to confirm the new details. If you’d like to get in touch to tell us about a change, contact us at: firstname.lastname@example.org.
How we rate financial products
We rate all financial products by assessing them against our Red Line Requirements. To achieve a five-star rating, products must meet or exceed every one of our Red Line Requirements.
Each Red Line is worth between 0 and 1, 1 meaning this feature has met or exceeded our red line and fractions of points allocated proportionately, dependent on how far the feature falls from the Red Line.
For example, in car insurance, at least £500-worth of cover for audio equipment must be provided to pass the Red Line in this area. We award 1 point to products which offer this much cover or more.
Let’s say a product offered £300-worth of cover. £300 is 60% of £500. So the product would receive a score of 0.6 for this feature.
We allocate a score of 0 for a Red Line if the product in question doesn’t have the relevant feature.
We've designed our scoring system in this way so that it can't be gamed. Companies must meet all Red Line Requirements to get five stars. They won't get more credit for adding in additional cover beyond our Red Line. They also won't get extra points for product features which don’t relate to our Red Lines.
Once all Red Line Requirements have been assessed, we add up all the scores to provide a total score for that financial product. Other star ratings are allocated using a measure of how far away each product is from achieving the maximum score. The maximum score varies depending on product type.
For a product to get a five-star rating, it must achieve the maximum number of points available by passing all our Red Line Requirements.
In most sectors, to receive 4 stars, a product must lose no more than 10% of the points. To receive 3 stars, a product must lose no more than 20% of the points. To receive 2 stars, a product must lose no more than 30% of the points. And products that lose more than 40% of the points are rated 1 star.
As one example, where the maximum score for a product area was 10, the star ratings would line up as follows:
- 10 = 5 Star
- 9 to 9.99 = 4 Star
- 8 to 8.99 = 3 Star
- 7 to 7.99 = 2 Star
- Less than 6.99 = 1 Star
What our Product Ratings mean
For insurance products:
Five stars - A product that receives a five-star rating provides enough cover in all areas where the majority of customers might reasonably need to make a claim. As with any rating system, there may be circumstances where our five-star rated products don't go far enough for individuals - but a five-star product should be adequate for most people, most of the time.
Four stars - A product with a four-star rating will have missed out on one or more of our red line requirements. It will still have an above average set of product features.
Three stars - A product with a three-star rating will have fallen short of our Red Line Requirements by a greater margin. It will have average features, which may be adequate for many customers.
Two stars - A product with a two-star rating is likely to fall short on a number of different criteria, and will have below average product features. It may still be suitable for certain customers.
One star - A product with a one-star rating will miss many of our red line requirements. It may be a suitable choice for some people. But anyone considering one of these products should make sure that it suits their needs, and take care to understand the limitations and exclusions to their cover.
For banking, online will writers and investment platform products:
Unlike our insurance ratings, our banking, online will writing and investment platform ratings take into account the price of the product. This is because consumers can incur additional costs over the life of the product.
Five stars - A product that receives a five-star rating costs less than the average amongst its peers, and has reasonable additional fees and charges associated with the account.
Four stars - A product with a four-star rating will have missed out on one or more of our red line requirements. It will still likely be cheaper than other products in the sector, but may have one or two additional charges which are above our red lines.
Three stars - A product with a three-star rating will have fallen short of our Red Line Requirements by a greater margin. It may cost slightly more than the average, or have a number of fees and charges that are above our red lines.
Two stars - A product with a two-star rating is likely to fall short on a number of different criteria. It will probably be more expensive than its competitors and may also have additional fees and charges that don't meet our red lines. They may still be suitable for certain customers.
One star - A product with a one-star rating will miss many of our red line requirements, and is likely to be significantly more expensive. It may be a suitable choice for some people. But anyone considering one of these products should make sure that it suits their needs, and take care to understand the limitations of the product.
For our equity release ratings:
Our equity release ratings focus on flexibility. Firms that have higher than average early repayment charges, or which don't provide downsizing protection are likely to get lower ratings.
However, products with lower ratings from us should be much cheaper. Adding in flexibility to products tends to raise the cost.
These ratings are designed as a stimulant for conversation with your financial adviser.
We work to assess as many products in each sector as possible; sometimes we cannot if they are only available through financial advisers or brokers. If we have missed a product within a sector where we already have ratings, please let us know and we will rate that product free of charge.
If there is a sector that we do not currently produce ratings for and you think we should, please also get in touch; we’d love to hear from you!
If you’d like to discuss using product endorsements on your marketing material, or to find out more about out methodology, please email email@example.com.