The FCA’s value measures data paints a picture of an industry in transition. While the headline figures show a broadly stable market, a closer look reveals that questions remain over the value of certain add-ons, even as core products like motor and home insurance continue to deliver consistent results.
According to the regulator’s data for 2024, the proportion of premiums paid out in claims across general insurance products ranged from 20% at the low end to 69% at the top – a similar spread to previous years. That overall stability, however, masks some persistent underperformers that have struggled to demonstrate fair value, despite growing regulatory scrutiny.
Motor and Home Hold Their Ground
Motor insurance, the UK’s largest general insurance line, remained steady in 2024, with claims costs accounting for around 54% of premiums, down slightly from 56% a year earlier. The claims acceptance rate remains at 99%, underlining the sector’s consistency despite ongoing claims inflation and repair cost pressures.
Home insurance told a similar story of stability — but with a few warning signs. Combined buildings and contents policies paid out 46% of premiums in claims, marginally up on last year, though claims acceptance rates slipped once again to around 71%, down from 77% when the FCA first published these figures for 2021. Complaints also ticked slightly higher, with 11% of home claims now resulting in a complaint[DK1] .
While the headline data might suggest little change, the underlying trend points to growing friction in claims outcomes for home insurance customers — an issue the FCA will likely keep a close eye on under its Consumer Duty framework, particularly given Which?’s recent super-complaint [link to super-complaint blog].
Add-Ons Under Pressure
Add-on products remain the weakest link in the value chain, and despite years of scrutiny, some still fall well short of expectations.
GAP insurance, long a focus of FCA attention, continues to distort the data. The product’s apparent improvement in 2024 — with claims costs exceeding 100% of premiums — is misleading, however, the result of reduced sales and continued claim payments following the FCA’s intervention last year.
Before that intervention, GAP add-ons were paying out as little as 10% of premiums in claims, highlighting the limited benefit received by most customers.
Other add-ons also struggled to deliver value. Personal accident cover again recorded almost no claims, with virtually zero claim frequency and a payout ratio of just 23% when sold as an add-on.
Before-the-event home legal expenses, meanwhile, remained among the poorest performers, with only 51% of claims accepted and one in ten resulting in a complaint.
In contrast, add-on motor legal cover continues to perform strongly, with 96% of claims accepted and virtually no complaints — proof that not all ancillary products are created equal.
Products Delivering Real Value
At the opposite end of the scale, several product lines continue to offer tangible value for consumers.
Healthcare cash plans again topped the table for payouts, returning around 69% of premiums in claims. With an average claim frequency of more than two per policy per year, they remain one of the few insurance products customers use regularly – albeit for low-value, high-frequency claims averaging around £65.
Elsewhere, breakdown cover continued to deliver consistent value, with more than 90% of claims accepted and frequent usage across both standalone and add-on policies. It’s a reminder that products delivering simple, visible benefits remain among the most valued by consumers.
A Market Finding Its Balance
For the most part, the 2024 value measures show an industry maintaining its footing after several turbulent years. Loss ratios in the major lines have settled following a period of pricing adjustments, and there are tentative signs that the FCA’s scrutiny of poor-value products is beginning to bite.
But the regulator’s message remains clear: stability should not be mistaken for success. The persistence of low-usage, low-payout products such as GAP, personal accident and home legal expenses insurance underscores the need for continued reform. Even major lines such as home insurance continue to exhibit below average claims acceptance rates.
At Insurance DataLab, we’ll be tracking how insurers and brokers respond as Consumer Duty reshapes expectations on product value and customer outcomes. Our data is essential for any insurance business serious about delivering value for customers, allowing you to better understand what good looks like in your market, as well as how you shape up against the competition.
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