Pet and travel insurance complaints rise amid regulatory scrutiny

The number of complaints about pet and livestock insurance referred to the Financial Ombudsman Service (FOS) increased by more than a quarter over the past year, making it the fastest growing source of complaints in UK general insurance (UKGI) – according to exclusive analysis by market intelligence firm Insurance DataLab.

FOS data for the first quarter of 2025 showed that almost 600 complaints were made about pet related policies between January and March this year, up 26% from the same period in 2024, when fewer than 475 cases were recorded.

This means that pet and livestock insurance is now the fourth most complained about business line in UKGI, with complaints having grown by more than 146% over the last five years.

Another concerning development for the pet insurance market is that more than 52% of complaints were upheld in favour of the customer over the first three months of 2025. This is around 19 percentage points higher compared to the same quarter in 2024 and represents the highest upheld rate of any UKGI business line.

These data points suggest a broader issue beyond isolated service failings in the pet insurance arena – the findings hint at potential weaknesses in product design, policy wordings and claims processes across this marketplace.

“Pet insurance might still be a relatively niche product in terms of volume, but the direction of travel here is significant,” explained Insurance DataLab co-founder Dan King.

“It’s not just that complaints are rising – it’s that a growing number are being upheld. That should prompt some serious reflection from insurers about whether these products are delivering fair value and good customer outcomes.”

Insurance DataLab’s analysis found that while claims related complaints remain the most common issue – accounting for more than 70% of complaints made to the FOS for this line of business – pet insurance is seeing a widening range of concerns.

Indeed, complaints about sales and advice rose by 73% year-on-year and now account for nearly a fifth of all pet cover cases, up from just 14% in Q1 2024.

“This is not just about how claims are handled – it’s also about how products are sold and explained,” added King. “Customers are clearly finding themselves with policies that don’t perform as expected and that disconnect raises further questions under Consumer Duty.”

Individual firm impact

Travel insurance also recorded a year-on-year rise in complaints, with more than 1,050 cases referred to the FOS in Q1 2025 — up 6% year-on-year. The average upheld rate is 37% across these cases, although performance varied significantly between providers.

One firm accounted for nearly 30% of all travel insurance related complaints over the last 12 months – after cases against this specific provider doubled – with some 47% upheld in favour of the customer. This is 10 percentage points ahead of the market aggregate for travel insurance products.

“The fact that one provider can have such a disproportionate impact on the market shows the importance of forensic benchmarking,” King noted. “It’s not enough to look at the overall market – firms need to know how they compare to individual competitors and understand who the outliers are.”

High complaints

Despite the rising complaint volumes across the pet and travel markets, car and motorcycle insurance continues to account for the largest number of FOS cases overall.

Almost 3,150 motor related complaints were referred to the ombudsman in the first quarter of 2025 – down 27% from 4,325 a year earlier.

Motor insurance now represents 31% of all FOS complaints, down from 40% in Q1 2024. The average upheld rate has also fallen slightly to 38%, broadly in line with the market average across all business lines.

Buildings insurance was the second most complained about product line in Q1 2025, with 1,725 cases recorded – a slight decrease from the same period last year.

This business line also reported an improved upheld rate of 40%, down from 43% in Q1 2024 – although it is worth noting that this is still higher than the market aggregate across all business lines.

When it comes to claims related complaints – which accounted for approximately 81% of all buildings insurance complaints over the last five years – the upheld rate rose to 43%.

Continued claims challenges

The FCA’s recent review of claims handling in the home and travel market, published in July 2025, found issues around claims handling – particularly relating to storm damage.

The regulator noted that of the 118,890 claims classified as storm claims, around 32% saw a settlement payment being made. Meanwhile, 49% were rejected for reasons ranging from damage being linked to general wear and tear rather than a storm, or weather conditions not meeting the insurer’s definition of a storm.

A further 19% of policyholders decided to not continue with making their claim – King believes this indicated issues around the claims process itself.

“A significant number of customers are giving up on their claim partway through the process,” he said. “That should be a concern to any insurer – not just because of the potential compliance risk, but because of what it says about trust and clarity in the claims journey.”

The regulator’s aforementioned review also highlighted shortcomings in insurers’ management information (MI), particularly around customer outcomes.

It noted that some insurers lacked the data required to monitor performance effectively, especially when outsourcing claims functions, while others were not tracking outcomes at all. The FCA added that “this raises concerns about the quality of customer outcomes”.

The regulator also pointed out that MI was often “limited in detail and disproportionately focused on financial performance metrics”, indicating that more needs to be done to properly analyse and benchmark customer outcomes.

With regulatory expectations rising and complaints data offering increasingly detailed insights into customer outcomes, insurers will need to continually adapt how they monitor, benchmark and improve performance – particularly in areas like pet, travel and buildings insurance, where consumer dissatisfaction appears most acute.