Consumer Group Which? Files ‘Super-Complaint’ Over Travel and Home Insurance Industry Practices
LONDON – Consumer champion Which? has lodged a formal “super-complaint” against the financial services regulator and the insurance industry, alleging systemic failures in the handling of home and travel insurance claims.The complaint, submitted to the Financial Conduct Authority (FCA), centers on claims handling, sales practices, and the FCA’s oversight of the sector.
The action follows analysis of numerous cases,including that of Mrs. Greenley, whose 60th birthday trip with her sister Beverley was ruined when her flight turned back mid-air. While the airline refunded her ticket, her initial £140 claim to her insurer for accommodation and airport transfers was denied because her holiday had already begun. The insurer later apologized, settled the claim, and paid compensation.
Which? argues insurers frequently outsource claims handling to specialists, leading to issues. The group also criticizes insurers’ sales practices, claiming they create confusion about policy coverage. Furthermore, the complaint accuses the FCA of failing to adequately protect consumers.
“A number of failures” have been identified, according to James Daley, managing director of independent consumer group Fairer Finance, who supports the super-complaint. “The FCA has only recently finished a number of studies looking at this market – and while it acknowledged a number of failures, it seems to have no appetite to tackle thes,” he said.
the FCA stated it would respond to the complaint within 90 days,as legally required,and confirmed it has been “focused on raising standards.” A spokesman said, “We uncovered issues when we recently reviewed insurers’ home and travel claims handling. We’ll be holding them and their senior managers accountable for the changes needed,” citing concerns over outsourcing and storm definitions.
The Association of British Insurers (ABI) defended its members, stating they “work hard to ensure customers knew the details of policies and handled claims as quickly and efficiently as possible.” The ABI highlighted notable payouts, reporting over £1.7 billion paid out for more than 300,000 home insurance claims in the first half of 2023, and £472 million across more than 500,000 travel insurance claims in 2022.
The ABI added it is “working closely with the regulator to ensure good outcomes for customers and will engage with Which? to understand the details of its concerns.”
