I really enjoy analysing the FCA’s complaints data, because I think it gives you a great sense of how the industry is faring behind pure profitability.
The headline figures of the regulator’s latest data paint a positive picture; complaint volumes are down year-on-year, so surely customers are more satisfied? Right? Well, perhaps not.
Despite this headline drop in volumes, resolution speeds are slipping, and redress costs remain structurally higher – signalling deeper issues that insurers will need to confront.
After several years of post-pandemic volatility, FCA complaints data is now revealing a clearer trend – and it is not an encouraging one.
While the number of complaints opened has fallen from the 2021 peak, insurers are resolving fewer cases quickly, and more customers are receiving compensation. This points to a structural service challenge rather than a short-term operational hangover.
The proportion of cases closed within three days has dropped from 56% in 2017 to 45% for the first half of 2025. At the same time, average redress payments have settled far above their pre-pandemic baseline, with the average redress payment of £123 for H1 2025 sitting as the highest figure on record, and far above the pre-pandemic average of £64.
Meanwhile, upheld rates surged in the immediate post-pandemic years and, while now easing back, remain a drag on customer outcomes with more than half (57%) of complaints being found in favour of the customer.
These shifts suggest that complaints are becoming more complex, more costly, and more likely to reflect genuine customer detriment.
For insurers, the message is clear: service performance is weakening even as pressure from Consumer Duty increases.
Falling volumes should translate into operational breathing room – instead, the industry is seeing slower turnaround and higher remedial costs.
That dynamic will not go unnoticed by regulators, and insurers need to act now in order to turn the tide on rising customer dis-satisfaction.
How Insurance DataLab can help
Our market intelligence platform features a wealth of regulatory compliance data, including the above FCA complaints statistics at a business line and company level.
Combining this with our Ombudsman complaints data and other metrics such as customer experience scores and FCA value measures turns Insurance DataLab into a powerful benchmarking tool. Subscribers can analyse their performance against the market, track trends over time, and identify emerging risks before they become a regulatory issue.
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