Motor outperforms home in latest FCA value measures data

A gap exists in the value that motor and home insurance products offer consumers, with home offerings lagging behind motor in both claims acceptance rates and payout levels.

This is according to an analysis of the FCA’s latest value measures data – which covers the year ending December 2024 – from market intelligence firm Insurance DataLab.

According to the datat, motor insurance products delivered good value to consumers, with claims being accepted in 99% of cases and payouts averaging 54% of premiums across 2024, while legal protection add-ons saw a 96% acceptance rate and few complaints.

Home insurance products, however, performed worse, with 71% of claims being accepted across the year and payouts averaging 46% of premiums.

Furthermore, after-the-event home legal expense insurance policies saw only 50% of claims accepted and a complaint lodged for every one in 10 policies.

Guaranteed asset protection (Gap) insurance, an area that underwent regulatory scrutiny earlier this year, saw a payout ratio of more than 100% of premiums after FCA intervention.

Deep divide

Dan King, co-founder of Insurance DataLab, said: “The overall stability in this year’s FCA data hides a deeper divide in the value customers receive. While core lines such as motor remain consistent, too many add-on products still deliver limited value or low claims acceptance.

“In the age of Consumer Duty and an increasingly interventionist regulator, insurers must ensure their products deliver genuine value for money. Those involved in personal accident and legal expenses add-ons should be particularly mindful given it would be no surprise if these products are next on the FCA’s watchlist.

“Those that can prove good outcomes for policyholders will not only meet regulatory expectations, but also strengthen customer trust and loyalty.”