FCA ramps up insurance standards in response to super complaint

The Financial Conduct Authority (FCA) is enhancing its efforts to improve standards in the home and travel insurance markets following a super-complaint from Which? The FCA plans to review claims handling and customer service over the next year. It aims to boost consumer understanding of insurance products and ensure firms provide accurate information at the point of sale.

While 79% of consumers who make an insurance claim are satisfied with how it was handled, the FCA says there’s room for improvement – with three in ten saying there isn’t enough information to judge the quality of different policies.

Over the next year, the FCA says it will do more to improve claims handling, by reviewing firms’ customer service and delivery and how they oversee third parties that handle claims. Improve consumer understanding of what their insurance covers, by analysing the different ways firms are selling products.

The FCA says it will continue to act against insurance firms where we have concerns.

Graeme Reynolds, Director of Competition and Interim Director of Insurance said “We welcome Which? shining a light on issues we identified in home and travel insurance. We’ve set out more detail on the action we’ve already taken to fix problems, and we’re expanding our existing workplan to improve the claims process and consumer understanding of their cover.

“We’ll be monitoring consumer outcomes and will continue to hold firms and their senior leaders to account for making improvements, to help build trust and make sure people get fair value insurance”.

Rocio Concha, Which? Director of Policy and Advocacy, said “Which?’s super-complaint exposed home and travel insurance markets that aren’t working for consumers – and we are pleased that the FCA has taken our concerns seriously. The actions announced today must be the first step towards fundamental reform to ensure these markets work better for consumers. 

“The regulator has pledged swift action to review and address problems with customer service, claims handling and how firms sell products, as well as on policy terms and conditions. These issues have been allowed to fester for years, so the FCA must now seize the opportunity to take strong action to stamp out widespread bad practice and issues with how the markets are working.

“Which? expects the FCA to work closely with insurers, comparison sites and consumer groups, but it is essential that any industry-led solutions are accompanied by firm action by the regulator. We will continue to work with the FCA – but also hold the regulator to account to ensure it acts with urgency and that these commitments lead to meaningful change for consumers.”