The Financial Ombudsman Service (FOS) has received nearly 190,000 complaints over the past five years, with motor insurance accounting for a significant share, according to analysis by Insurance DataLab.
The data highlighted a concerning trend for the insurance industry, with complaint volumes peaking in the first quarter of 2023 at nearly 12,000. This represents a 41% increase compared to the same period in 2022. Although complaints declined slightly to under 11,000 in the second quarter of 2024, volumes remain well above pre-pandemic levels and have exceeded 10,000 per quarter consistently since late 2022.
According to the report, motor insurance continues to dominate as the most complained-about business line in the UK general insurance (UKGI) sector, accounting for almost one-third of overall complaints. Over the past five years, the FOS has received close to 60,000 complaints about motor insurance.
Complaint volumes for motor insurance surpassed 4,000 in three of the last four quarters. The first and second quarters of 2023 recorded year-on-year growth exceeding 50%. Although Q2 2024 showed a leveling off compared to the previous year, it followed eight consecutive quarters of growth in complaints.
Buildings insurance ranks as the second most complained-about product line with nearly 30,000 complaints over five years. Travel insurance follows with 21,407 complaints, while home emergency insurance and home insurance saw 11,733 and 8,186 complaints, respectively.
Travel insurance also recorded the highest upheld rate—cases where the ombudsman ruled in favour of the customer—at 39%, among business lines with more than 5,000 complaints. Eight of the top 10 most complained-about product lines had upheld rates exceeding 25%.
Insurance DataLab co-founder Matt Scott, in a statement, emphasised the urgency for insurers to address these trends, particularly in light of Consumer Duty, a regulatory framework requiring firms to put their customers’ needs first.
“These figures are particularly concerning in light of Consumer Duty, which places a renewed emphasis on delivering good customer outcomes and demonstrating fair value,” Scott said. “High upheld rates and complaint volumes suggest that many insurers are struggling to meet expectations, facing not only reputational damage but also increased regulatory scrutiny if improvements are not forthcoming.”
Scott underscored the importance of leveraging data insights to identify trends, tackle root causes of dissatisfaction, and improve customer experience.
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