Ian Guest
Director @ Ether Introductions Limited
October 15, 2025
The Which? super complaint issued to the FCA is a comprehensive report setting out the failures of Home and Travel insurance in the UK.
The key focus can be boiled down to 3 key elements.
1. Poor claims handling
a. Low acceptance rates
b. Delays
c. Distress
d. Outsourcing issues
e. Issues for vulnerable customers
2. Inappropriate sales process
a. Lack of consumer understanding of what is covered
b. Key limits and exclusions not appreciated by customers
3. Lack of FCA enforcement
The intention is not to respond directly to the complaint (that is the FCA’s job) nor is it to challenge what is a very detailed report.
Rather, based on decades of experience, it is to add a wider view pertaining to the general themes raised within the confines of the claim’s themes raised.
However, before I get to the claims piece, on the inappropriate sales process I have dug up some consultancy work from nearly 20 years ago when I was working as an auditor looking at dedicated insurance price comparison sites for household insurance.
As more insurers used this sales channel, the initial trend seemed to be that more questions were added to cover all the questions and declarations each carrier had. The results of this can be seen below.
The highlights were that across 22 insurers, the average number of question fields were 27 and there was an average of 6 separate declarations. This equated to an average quote time of 9 mins with one carrier coming in at an astonishing 32 minutes.
So, accepting the requirement to make coverage clearer at the sales stage, the largest challenge is how to do this when more detail equals more time to quote which consumers generally do not want.
Claims
Let’s look at low acceptance rates.
As a Loss Adjuster and working with claims as a TPA I would categorise the type of claimants into three pots.
1. The genuine ones. Actual damage that was either caused by an event or which was brought to the policyholder’s attention by that event. Great when it is covered, not great when it wasn’t. We always had an enormous amount of sympathy for these folks and where liability did not engage, we would work with the insurer to see what, if anything, we could do for the customer.
2. The “chancers”. There is damage, but the claimant either knows, or strongly suspects that it was not because of the event in question.
Years ago, there was an horrific gas explosion in Essex which levelled a house and caused considerable damage to a wider area. Some 2 miles away a policyholder submitted a claim stating that due to the explosion:
• Their front gate now squeaked
• The rear patio door did not open and shut smoothly anymore
• All their windows now let in more of a draft than before
• Cracks to their ceiling were now worse than before
• “Maybe it’s my eyes but are some of the roof tiles looking like they have moved?” etc etc
3. The Fraudulent claimant. Either there is no damage, or the customer knows full well that it’s not covered, or that the damage pre-dates inception. I’ve arrived on site only for a claim to be immediately withdrawn “I didn’t think that they would appoint anyone to look”. I have also had to point out that the sales listing on Rightmove shows the water stain before they bought the property or that the wall that was “definitely blown over by the wind” is on Google Maps as fallen. From 3 years ago.
And my all-time favourite as a TPA. A prospective policy holder called in to get a quote. Once provided, he treble checked to ensure that Flood damage was covered as part of his policy, which was duly confirmed. As soon as the payment was processed, he asked to be put through to the claims department as he had a loss to report.
Beyond this, I believe that there are wider issues at play.
Taking available data from comparison site data and FCA published data sets, the general spread of claims outcomes is as follows.
Available data is scarce as insurers do not all categorise a withdrawal in the same way, but there would appear to be a small increase over the past 5 years from an average of circa 9% in 2020 to 12% in 2025.
But when you speak to claims suppliers, their view is very different. Claims volumes have certainly dropped but it is the lower value claims that seem to be affected most with more claims simply not proceeding.
With estimated average excess amounts climbing (see below), as are average premiums, consumers are increasingly aware of the financial impact a claim would have on their renewal costs.
I am not saying that this in anyway makes it OK for a consumer, it is just that it is not as simple as saying not enough claims are paid out.
The issue at hand boils down to cost. Despite the mass spate of consolidation that has, and will continue to take place, it is still a competitive market. Yes, average premiums are still climbing, but every carrier is doing everything they can to be competitive. The knock-on effect is that supplier rates (outsourcing) remain as keen as ever. If every insurer staffed for surge all year round, their cost base would be most likely prohibitive.
There are obvious failures in some of the processes, and these need to be addressed. But if we take a wider holistic view, the picture is not as bad as has been painted.
Using a combination of Which?, Fairer Finance and Trustpilot, the main insurers perform as follows from a customer perspective.
By way of comparison, the closest product I could think of was Car breakdown services. A product you buy but hope never to use. The three main providers in the UK average 4.6 on TrustPilot, so whilst ahead of many of the household insurers, it is by no means a chasm.
Focussing on Travel Insurance, I have been involved in a major tender for a packaged account. At every stage of the evaluation process, the focus was very strongly on customer process and delivery, and how to pay out low level claims as quickly as possible.
Clearly more complex claims have more moving parts, more suppliers and sub-suppliers, and understandably come with a higher degree of urgency, emotion and frustration. Ensuring that customer vulnerability, either at inception stage, or because of the circumstances of the claim, were noted and considered was a cornerstone of what was looked at.
If we look at the top 40 travel insurers (by volume of reviews left), the Trustpilot scores would suggest that in the main there are a lot of satisfied customers.
“You repair people’s homes after a disaster. We smash up fruit, bottle it and sell it at a markup. How is it people love us and hate you?“
A quote I’ll not forget from Innocent Smoothies when, as their insurer, they treated us to a full office tour.
Insurers do not always help themselves (rejected Covid claims overturned anyone?) but I genuinely believe that the products are as broken as the report would imply.
