Insurance DataLab’s analysis of the latest Financial Ombudsman Service (FOS) complaints data reveals that car and motorcycle insurance continues to be the most complained about business line, accounting for a third of total complaints over the course of Q4 2024.
Indeed, the analysis found that there were almost 3,600 motor insurance complaints referred over that period – although this was slightly down on the 4,000 complaints for the same period in 2023.
The second most complained about business line is buildings insurance with more than 1,700 complaints (16%), followed by travel insurance (1,100 complaints, 10%), pet and livestock insurance (600, 6%), and private medical and dental insurance (550, 5%).
Combined, these five product lines accounted for almost 70% of all general insurance complaints handled by the ombudsman during the final three months of 2024.
But volume alone doesn’t tell the full story – how complaints are resolved matters just as much, if not more so.
That is why the average upheld rate is a key marker of whether insurers are taking the right decisions in the first place, or whether claimants are being forced to escalate their concerns just to receive a fair outcome.
And worryingly for the market, three of the five product lines with the highest complaints volumes also have worse than average upheld rates.
Indeed, motor, pet, and buildings insurance all reported an upheld rate of 41%. This is some five percentage points above the market average across all business lines.
Meanwhile, GAP insurance had the highest upheld rate at 53%, followed by building warranties (52%), commercial vehicle insurance (49%), commercial property insurance (47%), and motor warranties (46%).
Under the Regulatory Spotlight
The combination of high volumes and high upheld rates makes the threat of regulatory action very real.
Those insurers that deliver strong underwriting profits but also generate high complaint volumes and high upheld rates are likely to attract closer regulatory scrutiny.
With the FCA expected to take a more interventionalist approach in the months ahead, it’s increasingly important for firms to identify and address any emerging issues within their books of business.
Since the introduction of Consumer Duty, insurers have been expected to actively demonstrate good outcomes for their customers, not simply avoid harm.
Complaints data is a critical metric in how the regulator assesses performance. By benchmarking against peers and the wider market, insurers can identify areas for improvement early and take action before problems become more serious.
Insurance DataLab’s platform allows insurance companies to track complaint volumes and upheld rates across the market, with filters by firm, product line, and complaint type.
Request a free demo to explore the platform in more detail. The platform also includes insights on underwriting performance, solvency data, broker and MGA financials, claims handling, and customer experience.