Which? has taken the rare step of filing a statutory super-complaint to the FCA about home and travel insurance alleging systemic failings in claims handling and sales practices.
At its heart, the complaint says too many customers are tripped up by unclear terms, slow or stressful claims journeys, and inconsistent decisions between firms offering broadly similar cover.
The document is explicit about the remedy: tougher enforcement of existing rules, a market study into what’s driving poor outcomes, and – if needed – updates to consumer protection so the legislation works in practice for these products.
For boards, the practical response is to widen the lens.
Internal management information can only get you so far – it shows how your business is performing but how do you know what good looks like unless you’re able to compare performance with competitors and the wider market?
And thIs is particularly important to understand when the regulator is looking for outliers in a market that it has been told is simply not working.
The good news is you can keep this incredibly simple. I’m sure that like many insurers, you’re measuring how many claims are paid, claims payouts, and the time it takes to settle claims. And, you may also be looking at complaints per 1,000 policies and FOS uphold rates to check that customers agree with your version of “fair”.
But are you looking at these same measures for your peers? A like-for-like comparison – same products, similar types of claims – will show where you’re doing well and where you need to tighten up relative to the rest of the market.
If you make claims decisions quickly and payout generously but see more FOS upholds than others, that could be a wording or communication issue. If you’re ahead on acceptance rates or time to first decision, say so plainly and show how you achieve it.
That way you’ve got a fair, balanced story for the regulator: here’s what we’re improving, and here’s where we’re already setting the pace.
And this understanding of where you sit in the market is important. If the regulator is being taken to task on how they oversee these sectors (and let’s be honest, the issue of customer trust is not just limited to travel and home insurance) then they are not going to just sit back and do nothing.
It would be no surprise if we start to see enforcement action relatively soon, and it is those insurers that are performing below market levels that will be targeted. And those that don’t even know that they are under performing will be in for an even tougher ride.
How Insurance DataLab can help
We provide a simple way to evidence compliance: monitor claims performance and complaints trends by line of business, compare them to competitors and market aggregates, and surface root causes so fixes are targeted and measurable. It’s practical, board-ready intelligence that supports Consumer Duty oversight and shows the regulator how you deliver good customer outcomes in real life.
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