Increase in noise induced hearing loss claims blamed for rise
The number of claims submitted to the Financial Services Compensation Scheme (FSCS) against general insurance providers have increased by 33% over the last year.
The FSCS received a total of 14,328 claims against general insurers for 2013/14, with compensation up £10m to £90m compared to the previous 12 months.
The scheme said this increase was largely due to an increase in claims for noise induced hearing loss.
Meanwhile, claims against insurance intermediaries fell by 36% to 12,120 and compensation was down to £40.9m from £56.4m.
Overall, the FSCS paid out a total of £243m in compensation over 2013/14, down 25% on the £326m paid out in 2012/13.
This was largely attributable to a fall in payment protection insurance (PPI) claims, which fell for the first time in four years.
PPI claims against failed Welcome Financial Services were down 58% to £5.5m. This takes the total paid out for the default of Welcome to £60.1m
Overall claims going to the scheme also fell. The FSCS received a total of 39,258 claims over the year, down from 62,030 for the previous 12 months.
The FSCS, which had running costs of £57.7m for 2013/14, also announced that it intended to make improvements to its service in the near future that would help reduce costs and lower levies.
FSCS chief executive Mark Neale said: “We’re continuously improving our processes to give people a better service. This includes modernising our claims handling process with, in the near future, an online facility through the FSCS website for consumers to make and track a claim. This will help us to improve our service for consumers while, at the same time, improving operational efficiency and helping to reduce costs for levy payers.”