taking the extraordinary step of using its statutory powers to submit a super-complaint to the Financial Conduct Authority (FCA) over its concerns about the home and travel insurance markets.
The consumer champion is focusing on these two types of insurance because they have some of the lowest levels of claims acceptance rates and the impact on consumers when things go wrong can be huge. The super-complaint is about these markets as a whole, not specific firms.
Over the past year, Which? has campaigned to End the Insurance Rip-Off and has produced a series of research reports exposing poor customer experiences – from widespread consumer confusion over what is covered by a policy, to frustrating and substandard treatment when people need to make a claim.
Poor levels of customer service and outcomes have been tolerated – both by the industry itself and the FCA. The regulator has conducted two in-depth reviews focused on claims- handling in home and travel insurance, first in 2014 and more recently this summer, and both reviews have found serious – and similar – issues. However, Which? has found little evidence that the FCA has taken meaningful action to address the many persistent problems that exist in these markets.
Which? believes this amounts to a pattern of consistent failure by the FCA to meet its statutory objective to secure “an appropriate degree of protection for consumers”. The consumer champion is launching a super-complaint now because consumers cannot afford to wait any longer for action to fix the broken home and travel insurance markets. The Which? super-complaint contains compelling evidence and original research based on surveys of thousands of insurance customers, in-depth interviews with people who have experienced problems, analysis of thousands of Financial Ombudsman Service (FOS) decisions and independent legal analysis.
It includes new evidence and focuses on three main areas: poor claims-handling; inappropriate sales processes; a lack of application and enforcement of FCA rules and other relevant law.
The consumer champion has heard from hundreds of people who have been left to endure ordeals at the hands of their insurers.
By law, the regulator now has 90 days to respond to Which?’s super-complaint.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“Which? using its legal powers to submit a super-complaint is a major intervention – but we believe it is necessary as serious failings in home and travel insurance have been tolerated for too long by the insurance industry and its regulator.
“Our evidence that the home and travel insurance markets are not working well is overwhelming and we have heard heartbreaking stories from people who have found the experience of dealing with an insurance company worse than the distressing life events that led to their claim.
“It’s time for the FCA to get a grip on the home and travel insurance markets and urgently intervene to make sure insurers up their game. This super-complaint should mark a turning point that leads to fundamental changes in how insurance companies treat their customers.”
