UK regulator issues response to consumer organisation complaint

The UK Financial Conduct Authority (FCA) has issued its response to the Which? super-complaint, stating that it is expanding the significant work planned to improve standards in the home and travel insurance markets.

Over the next year, the regulator plans to do more to improve claims handling (by reviewing firms’ customer service and delivery) and enhance consumer understanding of what their insurance covers. 

Cormac Bradley, Senior Actuarial Director at leading independent insurance consultancy Broadstone, commented: “The FCA has reaffirmed its commitment to improving consumer outcomes and understanding in the home and travel insurance markets.

“While much of the regulator’s response highlights existing actions and enforcement measures aimed at raising industry standards – which may leave some consumer groups wanting more – it has set out ambitions to strengthen claims handling and enhance consumer awareness of cover by 2026. These steps are essential to ensure policyholders make informed decisions.

“It is critical that firms handle claims effectively and fairly. Poor practices risk eroding consumer trust and widening existing protection gaps, leaving individuals exposed to negative outcomes. In particular, the use of cash settlements could attract scrutiny given the potential for under-compensation, and outsourcing claims handling may lead to inconsistent service and diminished customer care.

“Equally, if consumers do not fully understand what their policy covers, disappointment, and frustration during the claims process are inevitable. Greater transparency and proactive communication will be key to addressing these challenges.”

ITIJ reported on the initial super-complaint when it was announced.