FOS complaints data highlights persistent claims issues 

New data reveals claims-related complaints remain the dominant issue for insurers, with car insurance leading the way. 

Recent analysis of Financial Ombudsman Service (FOS) data by market intelligence firm Insurance DataLab reveals that claims handling continues to be the biggest cause of customer dissatisfaction across the insurance industry. 

Over the first six months of 2024, 71% of all complaints were related to the claims experience, dwarfing other issues such as administration (22%) and sales and advice (6%). 

This trend is concerning for insurers, as claims are often viewed as the key moment of truth for policyholders, and poor performance in this area risks damaging both customer trust and retention rates. 

The analysis also reveals the most troublesome business lines when it comes to claims. Motor insurance remains the largest driver of claims-related complaints with nearly 5,000 referrals to the FOS – this means it accounts for more than twice the volume seen in any other product line. 

Buildings insurance, meanwhile, had the second highest volume of claims complaints with almost 3,100. No other business line had more than 750 claims complaints referred to the FOS over the first half of 2024. 

These figures underline a continued need for improvement, particularly in high-volume lines such as motor and property insurance. While some business lines naturally generate higher complaint volumes due to the volume of claims being made, insurers must still ensure robust processes to deliver positive customer outcomes. 

The priority must be enhancing the claims experience to better meet customer expectations, reducing delays and improving communication, while also ensuring customers know what is and isn’t covered by a policy at the point of quote. 

By addressing these issues, insurers have an opportunity to turn the claims process into a positive experience that strengthens trust and loyalty – something that is particularly important in light of the General Insurance Pricing Practices (GIPP). 

Failure to do so not only damages the reputation of the insurance industry, but it also runs the risk of companies coming under regulatory scrutiny from the FCA, particularly given their renewed focus on customer outcomes under the Consumer Duty regulations.