Context
The FCA has conducted a review into the treatment of vulnerable customers by home and motor insurers and how they handle customer claims, warning insurers that they must improve.
Key points to note
Following an increase in complaints about insurance claims, the FCA uncovered examples of lengthy complaints handling times and people not given appropriate settlements, including instances of motor insurance customers being offered a price lower than their car’s fair market value, which is against FCA rules.
Some firms were unable to show they were monitoring customer outcomes well enough, and noted that better information sharing was needed where insurers dealt with intermediaries to settle claims. Some firms also failed to show they were adequately able to identify vulnerable customers in need of additional support.
The FCA is taking action against firms who have broken its rules and encourages customers to contact their insurance company to complain if have been delayed or they’re not happy with how their claims are being handled.
Examples of good practice the FCA found in its review include:
- Firms providing greater forbearance, waiving fees or excesses, offering payment holidays and setting up customer support hubs
- Dedicated website sections to help support vulnerable customers, both financial and non-financial
- The use of voice analytics and specialist training to help identify vulnerable customers.
Sheldon Mills, Executive Director, Consumers and Competition at the FCA, said “Timely and fair claims handling is especially vital during the cost of living squeeze. While we have seen many firms treating their customers correctly, we found too many examples of customers not receiving the service they’re entitled to. Where we found issues, we’ve told firms to put them right. We’ll be monitoring them to ensure they do.”
Next actions
None – for information and awareness.