Which? said its evidence that the home and travel insurance markets are not working was “overwhelming”
Insurance claims were back in the spotlight this week, with consumer champion Which? deciding to file a super complaint to the FCA.
Such a complaint is issued by a consumer body when it believes a large number of customers are being affected or harmed by certain practices within a sector.
In this month’s (September 2025) case, Which? decided to focus its ire on the home and travel insurance markets, alleging that these two products have some of the lowest levels of claims acceptance rates.
Numerical evidence supports the idea that consumers are looking for improvements in the way claims are being handled across these two sectors.
For example, in April 2025, market intelligence firm Insurance DataLab revealed that nearly 200,000 insurance complaints have been referred to the Financial Ombudsman Service (FOS) over the last five years.
Although car and motorcycle insurance related complaints comprised the majority of these at 61,700 complaints, consumers made 22,100 complaints about travel insurance products and 8,300 complaints about home cover over the last five years.
Furthermore, across the most recent 12 months of FOS data, Insurance DataLab added that complaints relating to claims made up the overwhelming majority of general insurance referrals to the ombudsman.
The market intelligence firm found that 71% of all complaints in the year to the end of 2024 were claims related.
These figures do indicate that Which? might have a point.
David Williams, non-executive director at loss recovery MGA Qlaims, told Insurance Times: ”The super complaint just adds to the battering that the insurance industry is getting – it makes our reputation even worse and provides further ammunition to those who want to criticise.
”In these days of social media, bad news spreads like wildfire. We know that the vast majority of people working in insurance want to do the right thing for customers, but an increasing number of people believe exactly the opposite.
”For an industry where trust is key – we are selling a promise after all – this is a major setback.
”Premiums are falling currently in a soft market, but as soon as that turns – particularly if it coincides with a further period of cost of living challenges – it will be much more difficult to convince consumers to part with their money.”
FCA action
Which?’s action comes despite the FCA consistently saying it will clamp down on poor claims practices.
Read: ‘Super complaint’ being issued to FCA over home and travel insurance concerns
Read: Motor policyholders to get £200m after some insurers short-change customers
Explore more claims related content here, or discover other news stories here
For example, on 19 September 2025, the FCA announced that over 270,000 motorists will receive £200m in motor insurance compensation after finding that some insurers had short-changed customers on stolen or written off vehicle claims.
The compensation is for historic claims that were underpaid, therefore breaching rules on handling claims fairly.
However, when it comes to the home and travel markets, Which? alleges that it has found “little evidence that the FCA has taken meaningful action to address the many persistent problems that exist in these markets”.
The consumer champion said its complaint contained evidence and original research based on surveys of thousands of insurance customers, in-depth interviews with people who have experienced problems, analysis of thousands of FOS decisions and independent legal analysis.
What will the FCA do?
In July 2025, the FCA told the insurance industry that while it saw some good practices in the home and travel insurance sectors, there was still “concerning evidence of poor claims handling practices”.
The regulator said that where it has seen poor practices from firms, it would address this directly with the businesses involved, including taking action against specific firms where necessary.
By law, the FCA has 90 days to respond to Which?’s super complaint – and I think it needs to respond sooner rather than later.
Before the Consumer Duty rules came into force in July 2023, the FCA wrote a letter to insurance firms about how it expected these new rules to be implemented.
It said that “firms should ensure they support consumer understanding and deliver good outcomes throughout the claim journey, through timely and appropriate communications”.
It is now two years later and the fact that such a super complaint is being submitted shows that not enough has been done to improve claims operations in home and travel insurance.
Williams agreed: ”When Consumer Duty was launched, there were no clearly defined requirements, [with the regulation being] principles based. But this just confused the market, [providing] no consistency and [introducing] a massive focus on reporting rather than remedying.
”[Consumer Duty is] over complex and unclear – the number of pages used is approaching ridiculous levels. Would it be so bad for the FCA, for once, to just succinctly and clearly state that certain things must be done?”
Mitigating action
Which? said in its super complaint that its evidence that the home and travel insurance markets are not working was “overwhelming” and as a result, I feel the FCA needs to act urgently to ensure that any improvements are made as quickly as possible.
If change is not actioned, Williams feels that “more and more customers will choose to do without insurance”.
Alongside improving the uptake of loss recovery insurance, Williams had a few suggestions in terms of next steps.
He explained: ”Publishing the high rates of claims that are actually settled can help, but insurers need to take a long hard look at the quality of service they are providing and admit that there is need for improvement.
”Policy wordings are confusing and work definitely needs to be done there. Even with clearer and simplified wordings, should customers not get a bit more help at claims time? You wouldn’t buy a house without expert input on your side – a large claim can be even more complicated and just as stressful.
”Restoring the balance of power between insurers and their customers could help improve trust as well, rather than [customers] just feeling they are left on their own battling with these professionals speaking in a completely strange language.”
The Chartered Insurance Institute, meanwhile, believes that sector-wide collaboration is vital to better claims service.
It noted: ”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 [following January 2025’s] ‘Road to Consumer Trust’ [roundtable] 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.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
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