Complaints to insurers surge in a year
17th July 2023Tweet
The latest figures from the Financial Ombudsman Service (FOS) reveal a bleak picture for complaints handling in the insurance industry, with analysis by Insurance DataLab revealing that many lines of business have increasingly high upheld rates.
The worst performer is special event insurance, with some 57% of complaints upheld by the FOS in the first quarter of 2023. This is an increase of 18% on the same period in 2022.
Building warranties, meanwhile, had the second highest upheld rate, with the FOS finding in favour of the customer in 44% of complaints – an increase of 17% in a year.
However, both received a relatively low number of complaints in total, 35 and 78 respectively, while travel insurance received a total of 1,426 complaints with 43% upheld. The two other product lines to receive more than 1,000 complaints over the first three months of the year were car and motorcycle insurance (4,221) and buildings insurance (1,805), with upheld rates of 33% and 39%.
Insurance DataLab co-founder Dan King said, “This should make for worrying reading for insurers, especially with the Consumer Duty implementation deadline looming large on the horizon. More than one in three complaints being upheld in favour of the customer and a significant increase in the number of complaints being referred to the FOS does not exactly scream Fair Value.
“And with the FCA stating that it will be looking for outliers in such data when it comes to monitoring performance post-implementation, those firms with particularly high upheld rates could well find themselves under scrutiny.”Tweet
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