Industry experts discuss the complexity of claims and the innovations needed to improve the experience for consumers

With the FCA imposing a range of new regulations on insurance firms over the last couple of years, the industry is under the spotlight more than ever to ensure that the service it provides is up to consumer expectations.

The way claims are dealt with is essential to this – as JMG chief executive Nick Houghton explained, insurance “is only ever about a promise to pay a claim if certain things happen”.

However, if you were to look at the latest complaints data from the Financial Ombudsman Service (FOS), it does not paint the best picture over the service customers are receiving.

Published earlier this month (11 October 2023), figures showed that 24,496 general insurance and pure protection complaints were made during H1 2023, up from 19,346 in H2 2022.

And its quarterly data, which was published earlier this year (14 September 2023), revealed that complaints over building, car and motorcycle insurance hit a five-year high in the first three months of the current financial year.

The regulator highlighted that this was partly due to insurers delaying paying out on claims and that it was “unacceptable” where complaints were driven due to this.

So why are claims taking longer to pay? According to Jon Walker, chief executive of Axa Commercial, the major challenge is often “a lot of complexity” and “a lot of moving parts”.

For example, he highlighted that different parties, such as third party loss adjusters and repair networks, often become involved.

“There are many factors that can drive claims taking longer,” he added.

“There is obviously a desire to get that claim settled as quickly as possible as it is not lost on us that if a business, for example, is waiting for a claim to be settled, often that is the difference between them being able to reopen their business or not.

“However, there is a lot of complexity that can make the answer [over delays in claims payouts] quite difficult to pinpoint.”

Claims journey

Despite this, Walker insisted that every insurer “recognised their responsibility” to help people get “up and running” as quickly as possible.

“There is no intent for claim settlements to take longer than is absolutely necessary,” he added.

There is no doubt this is the case, especially with the FCA’s new Consumer Duty regulations requiring firms to measure, analyse and benchmark their performance across a number of metrics to bolster their service.

This will be especially important when major events occur, such as the recent Luton Airport car park fire.

The multi-storey building burst into flames earlier this month (10 October 2023), with the blaze causing significant structural collapse.

And with more than 1,000 vehicles in the car park at the time, insurers have had their hands full with claims in recent weeks.

Walker felt communication was key in such situations so consumers knew where their claims would be.

“When you look at the cause of complaints in relation to claim settlements, it can often be that the customer does not know what part of the process it is up to,” he said.

“We should not underestimate the importance of that ongoing dialogue with the customer in order to ensure that at a moment in time, a customer does know where their claim is up to.

“That is sometimes where the use of digital technology can be useful to get that update.”

Ben Taylor, business development director at Automated Insurance Solutions, agreed, saying that technology would be key to ensuring customers were kept up to date with their claim.

“If you rely on call centres and manned inboxes, you can only process one of these things at a time,” he added.

”If you were able to upload all of the details of clients into a process that enables them to self-serve and fulfil their claim in order to be better informed and see genuine progress, that is the answer here.”

Digital portals

The rise of digitisation within the insurance industry is natural, especially given the impact of the Covid-19 pandemic.

For example, it was noted that the pandemic had fast-tracked the adoption and implementation of touchless claims – which refers to a claim filed with very little contact from a human, often via an app – during a roundtable hosted by Future Processing earlier this year (15 June 2023).

Richard Beaven, chief operating officer at broker Academy Insurance, said that in this digital age, insurers were trying to build enhanced customer portals so they could better communicate with consumers as to where they were in the claims journey.

And he felt they were doing this to reduce the queues of people trying to get in touch with an insurer’s call centre.

“The biggest issue for many customers was them not knowing where they were in the journey,” he said.

“So, a number of insurers have got quite good portals now for a customer to at least let them know where they are, which is helpful for customers.”

And Ceri James, head of underwriting and claims at insurance solutions provider Kingsbridge, also felt portals could help provide consumers with a better claims experience.

“We’ve been looking a lot towards whether we can move more towards portals and if we can handle it more smoothly through the system,” she added.

AI or humans?

Given the shift to digital portals to help with customer journeys, artificial intelligence (AI) may be a key factor in helping them succeed.

AI has started to be used in the industry – for example, earlier this year (27 March 2023), insurer Zurich said it was experimenting with the tool as it explored how it could use the technology for tasks such as extracting data for claims and modelling.

Taylor said AI was “fantastic” at dealing with high volume, low complexity matters.

“As long as they are trained in the right way and restrictions are put in place on the way they communicate with people, it should be able to articulate responses to customers in a much more natural way, without the need to necessarily always defer to a human expert,” he said.

However, he added that human expertise was still required to deal with higher complexity cases.

“And humans are also needed for when somebody needs a bit of reassurance,” he added.

“AI is getting better at it, but they certainly are not there yet.”

James agreed, feeling that there would always be an aspect of “hand holding” needed when it came to claims.

“People want to speak to somebody and be reassured,” she said.

”[With claims], it is about doing a process that’s smart, but does not miss out on key steps.”


As a result, it seems clear that in this digital age, a good claims service for consumers is about striking the right balance between human expertise and innovation.

Walker said that when designing such systems, it was important to be “thoughtful about where the value-add is” and always make sure that options existed.

And he felt that while there was lots of technology for insurers to use, the importance of the option for human contact must be stressed.

”You would design a process where you’d put the person at the front of it, where it is completely appropriate,” he said.

”Even if there are parts of the process where you thought you could use technology, you should still give an individual the option to get easily and quickly to a person if that is their preference.

”The power of the two, if used appropriately, can be quite powerful.”