A complaint against the entire insurance industry seems optimistic on the part of Which?, the activist consumer group. But there’s no doubt that policy wording is an area where a multi-lingual, ChatGPT essay society demands a total re-think on the archaic English used as standard. Claims is another bone of contention for many consumers, as they feel hard done by and the recent arguments over car values highlights those concerns.
Here’s some comment for you;
James Daley, managing director of independent consumer group Fairer Finance said:
“We welcome the Which? super–complaint and hope that the FCA will take this as an opportunity to go back to the drawing board. Insurance provides essential protection for millions of consumers, but the market is not currently working. While comparison sites have helped create price competition, they have also accelerated a hollowing out of products and services – meaning many consumers buy policies that don’t meet their needs. Many more find themselves let down by poor claims handling – as there are no easy ways to work out which companies can be trusted.
“The insurance market too often lets customers down. Its products are complex – and insurers and comparison sites don’t do enough to help match people together with products that meets their needs. Worse still, insurers’ approach to claims handling varies enormously – with some firms putting too much emphasis on containing costs rather than looking after their customers.
“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 these.
“We need to work on building an insurance market that is trusted and valued by consumers. That will require new rules, and a tougher enforcement of Consumer Duty. It’s important that the FCA is not cowed by the government’s deregulatory agenda. A trusted insurance industry underpins financial stability and is crucial if we are to return the economy to growth.”
Meanwhile Sara Perez, executive vice president, EIS offers these thoughts;
“The Which? super–complaint may not be an attack on individual insurers, but it is a consequence of an outdated operating model. The heartbreaking stories it highlights are the result of a policy-centric organisational mindset that puts products ahead of people.
“Consumers expect insurance to protect them when their home is burgled or when something goes wrong on holiday. Yet in too many cases, they only discover at the point of claim that their cover is riddled with exclusions they hadn’t realised were there, or that they are underinsured because their policy hasn’t kept up with life changes. Many insurers struggle to monitor these changes — not through lack of intent, but because outdated systems make it difficult to keep cover and premiums up to date.
“This isn’t the customer’s fault. It reflects an industry that often makes the buying process complex, doesn’t always explain clearly what’s included and lacks the flexibility to guide customers when policies need to be updated.
“The instinctive industry response may be to tighten processes, re-train staff, or issue apologies. But that won’t mend the deeper issue of trust. Consumers don’t buy a policy, they buy peace of mind. And peace of mind can only be delivered if insurers have the organisational and technological flexibility to clearly communicate policy terms before purchase, and to respond quickly, clearly, and fairly when consumers activate their policy.
“To rebuild trust, insurers need to move beyond their policy-centric silos and embrace a customer-centric model. That means modern platforms that make it easier to design, adapt, and explain cover in real time. It means breaking down barriers between departments so customers don’t fall through the cracks. And it means rethinking insurance not as a product transaction, but as an ongoing relationship of protection and trust.
“Leaving aside for a moment the specifics of The Which? Compliant and the FCA award, it is important to note that many insurers, despite the best intentions, remain handcuffed by outdated technology. Legacy core systems, often holding decades of policy records, silo data and make it virtually impossible for employees to take positive action and engage with customers at the level that they are seeking.
“The FCA can call for higher standards, but insurers themselves need the tools to meet them. Many are already on this journey — but the industry as a whole must accelerate. The time for patching over cracks has passed. If the industry is serious about repairing its relationship with consumers, it must re-platform around the customer — and do it now.”
CII COMMENT
“The FCA’s work in this space, and our own insight suggest that while insurance markets serve many consumers well, there are clear instances where service and support can be improved. For example, the CII’s Public Trust Index suggests consistently that around 4% of home, motor and travel insurance customers are dissatisfied with the service they receive. Although this is a small number, it amounts to over a million members of the public.
While the Which? report highlights regulatory shortcomings, we believe that responsibility for improving consumer protection should be a collaborative endeavour with the sector, with firms renewing their shared commitment to high standards of ethics, conduct, and professionalism.
Our ongoing work on the ‘Road to Consumer Trust’ aligns with many of the challenges outlined by Which?, including the principle that every insurance claimant should be treated as vulnerable. We also advocate for outcome-driven data sharing, underpinned by common standards and an ecosystem that promotes customer value, while recognising the cultural and technical barriers that must be addressed.”
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