Claims lead to greatest number of insurance complaints

Article supplied by Insurance DataLab

The number of general insurance complaints referred to the Financial Ombudsman Service (FOS) rose by a third over the final three months of 2022.

More than 8,700 complaints were referred to the ombudsman over that period, according to the latest analysis from Insurance DataLab, up from a little under 6,600 for the same period a year earlier.
This means that complaints have once again reached pre-pandemic levels, after peaking at almost 9,000 cases during the second quarter of 2022.

The vast majority of these complaints relate to the claims process, accounting for some 77.4% of cases referred to the FOS over the last five years.

Meanwhile, 20.1% of cases over that period related to admin complaints, while 2.6% related to sales or advice.

Despite these figures, the proportion of complaints relating to the claims process has been falling over recent months, with 68.5% of complaints referred to the ombudsman over the final quarter of 2022 relating to claims.

This is down from 77% for the same period a year earlier.

Despite this improvement, these figures should still be a concern for those working in the claims industry, as it is evidence that insurers are not getting things right when a customer comes to make a claim.
The problem, however, is likely to come much earlier in the process, namely at point-of-quote, with inadequate explanation of policy limits and exclusions creating an expectation gap between consumers and their insurer.

And it is this expectation gap that is leading many policyholders to believe that certain risks are covered under a policy when in fact it was never the intention of a policy to provide protection against such an event.

Interestingly, claims-related complaints also have the highest upheld rate – the proportion of cases which the FOS uphold in favour of the customer.

Indeed, over the last five years the ombudsman has found in favour of the customer in 32% of claims complaints, compared to 30% for admin-related complaints and 18% for complaints relating to sales or advice.

About Insurance DataLab is a market intelligence and research service, focusing on the performance of insurers, Lloyd’s syndicates, MGAs and brokers based in the UK and Gibraltar.

With hundreds of thousands of data points covering almost £100bn of annual gross written premium and featuring more than 1,000 insurance companies and brands, provides access to comparable industry data to help providers benchmark performance, assess existing and potential partners and identify new opportunities.


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