Can Insurers Afford Not to Verify Competence in Their Restoration Supply Chain?

This piece is by Mark McMullen, managing director of Rainbow Restoration.

Introduced in 2023, the Financial Conduct Authority’s (FCA) Consumer Duty requires insurance companies to deliver good outcomes for consumers throughout the entire customer journey, ensuring products offer fair value, clear communication and adequate support.

The moment insurance proves its value

For most consumers, it’s only at the point of making a claim that insurance proves its value. In the case of building insurance, that moment often comes after a flood, fire, escape of water or weather incident, when policyholders are relying on their insurer to respond quickly, communicate clearly and help put their business or their home – and their lives – back together.

While most home insurance claims are handled promptly and to customers’ satisfaction, the FCA made clear at the end of last year that its work in 2026 will include greater scrutiny of claims handling, customer service and how firms oversee outsourced providers involved in the claims journey.

This last point – the role of outsourced providers – stems from the fact that the Consumer Duty judges insurers not only on their own performance, but on the performance of the third parties acting on their behalf.

The challenge of outsourcing

The Association of British Insurers (ABI) has made clear that, when handled correctly, outsourcing parts of a customer’s claim to experts can have very significant advantages in ensuring policyholders get the right outcomes.

However, it acknowledges that when things go wrong, having additional contractors in the supply chain can lead to delays, disrupted communications and/or additional costs.

The ABI continues to work with its members to promote responsible claims handling and reduce risks associated with outsourcing.

In the meantime, the FCA’s current focus on the home insurance market and its ongoing efforts to embed the Consumer Duty across the industry raise an important question for the home insurance and property restoration sector: should insurers now require formal accreditation or recognised qualifications from the contractors they send into customers’ homes?

Restoration is a specialist discipline

When a property has suffered significant water or fire damage, restoration work is far more complex than many people realise. Drying a building incorrectly can result in hidden moisture, mould growth and long-term structural issues. Fire residues can create contamination risks if not handled properly.

In both scenarios, poor decision-making at the early stages of a claim can increase repair costs, extend the period policyholders are out of their businesses and homes and create additional stress for customers who are already dealing with a stressful situation.

Yet, despite its technical nature, there is currently no universal requirement for property restoration technicians to hold formal qualifications before undertaking this type of work.

That may surprise consumers, many of whom might reasonably assume that anyone appointed by their insurer to assess contamination, dry a property or manage post-fire remediation has been formally trained and/or independently assessed as competent to do so.

In reality, while the UK property restoration sector contains many highly-skilled, experienced operators who deliver excellent outcomes for insurers and customers, standards across the sector can vary significantly. There is also inconsistency in how competence is evaluated and evidenced.

Consumer Duty changes the conversation

The Consumer Duty means that alongside factors such as response times, geographic coverage and costs, insurers will increasingly need to consider their ability to demonstrate that the restoration suppliers they appoint are operationally capable of delivering good customer outcomes.

In practical terms, this means insurers may need to ask more searching questions of restoration services firms. How are technicians trained and assessed? Do they hold recognised qualifications or industry accreditations? How are vulnerable customers handled? What quality assurance processes exist? How is consistency ensured across different regions and teams?

While formal accreditation, training and qualifications do not guarantee good service, they do provide insurers with evidence that technicians have been assessed against recognised standards and that suppliers are investing in skills development, rather than competing on cost and speed alone.

The commercial case for accreditation

This matters to insurers not just in the context of the Consumer Duty, but commercially too, as poor restoration outcomes can lead to delays, customer complaints, rework and secondary damage, all of which increase claims costs and can damage an insurer’s reputation.

In contrast, technically competent restoration, carried out quickly and correctly, can reduce reinstatement costs, shorten claim lifecycles, improve customer retention and enhance an insurer’s brand.

There is little doubt that high-quality training and documented competence make it more likely that meaningful, consistent standards are in an environment where they matter.

The challenge, however, is ensuring that any move towards greater accreditation avoids becoming a box-ticking exercise and actually results in better and more consistent outcomes for policyholders.

Is the industry ready for higher standards?

As regulatory scrutiny of claims handling increases, the drive to achieve compliance – in addition to the industry’s existing commitment to improving customer experience – means home insurers are likely to place greater focus on every part of the supply chain.

Restoration providers will inevitably be part of that conversation. Is it time for the insurance industry to set, measure and evidence the standards expected of them more consistently than in the past?

The companies insurers appoint to manage property restorations enter customers’ businesses and homes at moments of extreme stress and disruption. Their competence has always been important, but in the context of the Consumer Duty, the ability to demonstrate and prove that competence may become essential.

Rainbow Restoration is the only disaster restoration specialist in the UK that mandates City & Guilds Assured training for all its 200 restoration technicians based across the UK.