When the FCA restarts its review of the retail insurance market in 2026, the focus will be squarely on outcomes.
Not whether internal rulebooks have been rewritten. Not whether governance frameworks have been refreshed. But whether customers are experiencing broadly consistent standards across the market.
Three years after pricing reform and two years into Consumer Duty, there is now enough data to test that properly. And the results challenge the assumption that retail insurance is steadily converging towards uniform performance.
The Problem with Market Averages
Regulatory debate often focuses on direction. Are claims acceptance rates rising or falling? Are complaints volumes increasing or decreasing?
But averages hide dispersion.
In a mature retail market subject to sustained transparency and supervisory pressure, performance gaps should narrow over time. Firms should converge around broadly consistent standards.
If one insurer accepts 90% of claims and another accepts 55%, that is not a marginal commercial difference. It is a fundamentally different customer experience.
The more meaningful test, therefore, is not whether outcomes are improving on average – but whether the spread between firms is shrinking.
The Truth Behind the Numbers
Motor insurance remains tightly clustered at the top end of claims acceptance, with most firms sitting within a narrow band of 95% to 100%, according to the latest FCA Value Measures data.
However, the data also shows a widening at the extremes.
The gap between highest and lowest performers has increased compared with previous years – with some insurers having acceptance rates as low as 70% to 75% in the latest set of FCA Value Measures.
This means that while the centre of the market looks stable, the edges do not. That is often how fragmentation begins – not with wholesale decline, but with persistent outliers.
Buildings and contents insurance present a more striking picture.
Across both lines, the spread between top and bottom performers remains wide – sitting at some 45 percentage points with acceptance rates ranging from 50%-55% to 95%-100%.
This shows that despite value measures transparency, heightened claims scrutiny and Consumer Duty implementation, outcome dispersion remains significant.
Meanwhile, travel insurance shows clearer signs of convergence than other retail lines, at first glance.
Indeed, the overall range between firms has narrowed since 2021 – falling from 95% to 40%. It is worth noting, however, that this was largely driven by a single outlier with an acceptance rate of 0% to 5%, and when that company is excluded, the drop in the range between the best and worst performer falls to just five percentage points.
However, this still means that the gap between best and worst performers remains substantial – some 40 percentage points according to the latest FCA Value Measures.
Why this matters for the FCA’s review
Dispersion is not inherently problematic. Firms have different risk appetites, underwriting strategies and operating models.
Persistent outliers, however, rarely escape supervisory attention for long.
And these wide outcome gaps raise structural questions:
- Are delegated claims models driving uneven oversight?
- Are some product designs inherently more dispute-prone?
- Has transparency changed behaviour – or simply exposed divergence?
- Are certain firms repeatedly appearing as outliers?
If regulatory reform was intended to lift standards across the market, sustained dispersion suggests that lift has not been uniform.
The retail market may not be deteriorating. But nor is it clearly converging.
And that distinction matters.
Taken together, the data suggests a retail market that remains structurally uneven.
- Motor is clustered, but outliers are getting more extreme.
- Home lines remain widely dispersed.
- Travel shows improvement, but not alignment.
For customers, outcomes can still vary materially depending on provider; for regulators, scrutiny is unlikely to be evenly distributed; and for firms, relative performance matters more than ever.
The FCA’s review is unlikely to focus solely on averages. It will look at outliers – and at persistence.
In this environment, what matters most is clarity.
Firms need to know where they sit relative to the rest of the market – and where their partners sit too. Because when dispersion remains wide, relative position becomes strategically important.
Understanding whether you are operating within the market core or drifting towards its edges is no longer optional – it is central to governance, oversight and regulatory resilience.
How Insurance DataLab can help
Understanding whether your firm sits within the core of the market – or at its edges – requires more than internal MI.
Insurance DataLab provides independent benchmarking across UKGI, covering claims outcomes, complaints trends, financial strength and operational performance.
If you would like to see how your performance compares with the wider market ahead of the FCA’s review, you can request a demo of the platform here.