Which? Submits Super-Complaint to Overhaul Insurance Practices

Which?, a prominent consumer advocacy group in the United Kingdom, has formally submitted a super-complaint to the Financial Conduct Authority (FCA). The complaint highlights significant failings in the home and travel insurance markets, urging for immediate reforms aimed at improving consumer protection. Rocio Concha, director of policy and advocacy at Which?, emphasizes the necessity for a fundamental reset in how insurance companies treat their customers.

Insurance is an essential component for many households, providing financial security and resilience. Concha notes that “insurance is not a luxury product,” but rather a critical safeguard for millions. When claims are mishandled, the impact can be devastating, particularly following traumatic events. Unfortunately, the report reveals a troubling trend of inadequate service and poor customer outcomes, which have persisted unchecked by both the insurance industry and the FCA.

Consumer trust in insurance services has remained alarmingly low, with Which? data indicating that only social media platforms rank lower in public confidence. Acceptance rates for claims in both home and travel insurance sectors have consistently fallen short, with fewer than two-thirds of buildings-only claims being approved. In some instances, major companies have accepted as few as one-third of claims.

The findings also reveal that over half (54 percent) of people who attempted to make a claim faced at least one issue, with 51 percent of those severely affected by their incident reporting negative impacts on their mental health due to their insurers’ actions.

Human Stories Highlight Industry Failures

The distressing personal accounts collected during Which?’s research underline the need for urgent attention. One couple, displaced by a fire just weeks before the birth of their second child, reported feeling “gaslighted” by their insurer, leading them to escalate their dispute to the Financial Ombudsman. Another individual, Claire Massey, has turned her own traumatic experience with a house fire into a mission to assist others navigating similar challenges in the claims process.

Such stories illustrate that consumers should not have to endure unnecessary hardship to receive fair treatment. Regulatory measures exist to curb unprofessional conduct among insurers, yet the FCA has been criticized for its lack of meaningful action despite having reviewed claims handling practices twice—once in 2014 and again in early 2023.

Which? asserts that the FCA has consistently failed to fulfill its duty to protect consumers adequately. The organization’s new super-complaint includes extensive evidence of these failures, emphasizing that consumers cannot afford to wait for improvements in the home and travel insurance sectors.

A Call for Regulatory Action

The situation demands urgent regulatory action. While the path to reform may not be straightforward, the FCA has an opportunity to address current breaches and conduct a thorough investigation into the issues outlined by Which?. Following this, collaboration between the government and the FCA to review the UK’s consumer insurance protection frameworks is essential for identifying areas needing enhancement.

This initiative should not threaten insurers that adhere to regulations and prioritize customer care. On the contrary, it should provide them with reassurance that their responsible practices will protect them from being undercut by less scrupulous competitors. A commitment to higher standards can bolster investor confidence and contribute positively to economic growth.

Rocio Concha insists that this pivotal moment should prompt a comprehensive transformation in how insurance companies design and sell policies, communicate with clients, and manage claims. If successful, the insurance industry could regain consumer trust, positioning itself as a reliable partner in times of crisis rather than an obstacle in the recovery process.