Which? launches super-complaint to Financial Conduct Authority over insurance market failings
Which? is today taking the extraordinary step of using its statutory powers to submit a super-complaint to the Financial Conduct Authority (FCA) over its concerns about the home and travel insurance markets.
The consumer champion is focusing on these two types of insurance because they have some of the lowest levels of claims acceptance rates and the impact on consumers when things go wrong can be huge. The super-complaint is about these markets as a whole, not specific firms.
Over the past year, Which? has campaigned to End the Insurance Rip-Off and has produced a series of research reports exposing poor customer experiences - from widespread consumer confusion over what is covered by a policy, to frustrating and substandard treatment when people need to make a claim.
Poor levels of customer service and outcomes have been tolerated - both by the industry itself and the FCA. The regulator has conducted two in-depth reviews focused on claims- handling in home and travel insurance, first in 2014 and more recently this summer, and both reviews have found serious - and similar - issues. However, Which? has found little evidence that the FCA has taken meaningful action to address the many persistent problems that exist in these markets.
Which? believes this amounts to a pattern of consistent failure by the FCA to meet its statutory objective to secure “an appropriate degree of protection for consumers”. The consumer champion is launching a super-complaint now because consumers cannot afford to wait any longer for action to fix the broken home and travel insurance markets. The Which? super-complaint contains compelling evidence and original research based on surveys of thousands of insurance customers, in-depth interviews with people who have experienced problems, analysis of thousands of Financial Ombudsman Service (FOS) decisions and independent legal analysis.
It includes new evidence and focuses on three main areas: poor claims-handling; inappropriate sales processes; a lack of application and enforcement of FCA rules and other relevant law.
The consumer champion has heard from hundreds of people who have been left to endure ordeals at the hands of their insurers. These include Dean and Kaja Cordwell, from South Wales, who say dealing with their insurer has been devastating for their family and they feel it has caused more distress than the fire that wrecked their home. As renovation work remains incomplete 18 months on, Dean, Kaja and their young family are still locked in dispute with their insurer LV General Insurance (LVGI) and say they feel “gaslighted” by the firm. They are now poised to take their case to the FOS. LGVI said they did what they could to progress the complaint and point to other causes for the delay.
Another insurance customer, Yvette Greenley, told of how a holiday to Egypt two years ago was curtailed due to a technical issue with her flight from Luton Airport two hours after take-off. Yvette was taken back to Luton and was unable to go on her holiday. While WizzAir refunded her for her flights, she was out of pocket for accommodation and travel costs to and from the airport. Once she went to make a claim on her travel insurance policy, her insurer Axa Partners told her that her flight’s departure meant her holiday had technically taken place and she was not eligible to claim. Since Which? raised this case with Axa Partners, the company has apologised to Ms Greenley, settled her claim in full and offered compensation for the delays she faced.
By law, the regulator now has 90 days to respond to Which?’s super-complaint.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“Which? using its legal powers to submit a super-complaint is a major intervention - but we believe it is necessary as serious failings in home and travel insurance have been tolerated for too long by the insurance industry and its regulator.
“Our evidence that the home and travel insurance markets are not working well is overwhelming and we have heard heartbreaking stories from people who have found the experience of dealing with an insurance company worse than the distressing life events that led to their claim.
"It’s time for the FCA to get a grip on the home and travel insurance markets and urgently intervene to make sure insurers up their game. This super-complaint should mark a turning point that leads to fundamental changes in how insurance companies treat their customers.”
ENDS
Notes to Editors
- The latest Financial Conduct Authority’s general insurance value measures data reports that the claims acceptance rate for home (buildings) insurance was 63 per cent; for travel insurance (single-trip, standalone) it was 80.4 per cent
- Please contact the press office to arrange interviews with a Which? spokesperson or case study mentioned in this press release.
Super-complaint explainer
A super-complaint is a complaint submitted by a consumer body on behalf of large numbers of customers - where it believes that their interests are being significantly harmed by practices in a market.
Only certain organisations have been given the legal power to make super-complaints as consumer bodies.
Which?’s last super-complaint was submitted in 2016 over our concerns about banks’ treatment of victims of authorised push payment fraud. While initially rejected by the Payment Systems Regulator, within years the government legislated to protect bank transfer fraud victims by introducing a mandatory system of reimbursement.
By law, the FCA has 90 days to review and respond to the super-complaint.
Gov.UK - What are super-complaints?
Case studies
Kaja and Dean Cordwell
In January 2024, Kaja and Dean Cordwell, from South Wales, had to leave their home after it was badly-damaged in a fire when Kaja was two weeks away from giving birth to their second child. Kaja and Dean were moved into rented accommodation by their insurer, LVGI while they waited for renovation work to take place. They claim they were told this would take three to six months. However, the Cordwells say that issues started quickly afterwards. LVGI took several weeks to send cleaners into the house and building work only started in June - some six months after the fire. When the builders got there, they were reportedly told that LVGI had not provided the necessary property certification for them to start work. When the certification was finally completed in September, LVGI's builders said they no longer had capacity to carry out the work and walked out on the project. After eight months, Kaja made her first formal complaint to LVGI. The company initially told her they did not have any other builders to carry out the work, before seemingly backtracking and finding a new set of builders. Problems persisted as LVGI and the second set of builders could not agree on what work should be carried out.
After a period of further chasing and feeling ignored by LVGI, Kaja enlisted the support of her local MP, who helped to set up a video call with all parties. On the call, Kaja claims the insurer agreed to allow her to book in an independent surveyor and to continue paying for their rent in alternative accommodation. After the call, Kaja believes that the LVGI employees on the call were either made redundant or moved to another department and she says LVGI refused to acknowledge and honour the commitments made on it, leaving her to feel as though she has ‘imagined’ it ever taking place. The Cordwells said they were so frustrated with the process that after around nine months they appointed their own loss assessor. Until this point, they claim that LVGI refused to offer them a cash settlement. Afterwards, the Cordwells claim LVGI offered settlements for renovations well below the quotes received from their independent assessor, and gave them a ‘take-it-or-go-to-the-Ombudsman’ ultimatum. Dean and Kaja claim they were offered a cash settlement by the insurer of around £57,000 - a figure arrived at, the Cordwells claim, without consulting builders. This was also despite Dean and Kaja employing a certified quantity surveyor who obtained two quotes for work at closer to £80,000. Dean and Kaja have still not been able to return to their home and are poised to take three complaints to the Financial Ombudsman Service. The experience, Dean and Kaja say, has had a significant impact on their family life and they have felt LVGI was ‘gaslighting’ them throughout the process. LGVI said they did what they could to progress the complaint and point to other causes for the delay.
Yvette Greenley
In June 2023, Yvette Greenley, from Northampton, was supposed to go on a week-long holiday to Egypt, flying from Luton Airport. Due to a technical fault with the plane, the flight was turned around after two hours and returned to Luton, meaning she could not go on her holiday at all. When Yvette went to make a claim, she was shocked when her insurer, Axa, told her that her holiday had technically taken place, so she couldn’t claim. While WizzAir refunded her the cost of the flights, Yvette was still out of pocket for around £140 in expenses for accommodation and travel to and from the airport. Since Which? raised this case with Axa Partners, the company has apologised to Ms Greenley, settled her claim in full and offered compensation for the delays she faced.
Steve Leek
Steve Leek, from Bromley, claims that after a water pipe under his house burst, causing significant damage, his insurer, Churchill, told him he was not covered for the damage to the pipe itself. Steve was told he would have needed to take out extra cover. He believes such exclusions should be made much clearer to customers when they are taking out policies.
Steve says he was left to spend a significant amount of money on experts to dig up his kitchen and conservatory to inspect and mend the piping, while Churchill only offered to help with redecoration costs. In the end, Steve cancelled his claim with Churchill and paid for decoration costs himself. Churchill said that if Mr Leek was able to provide further documentation about the repairs, it would be happy to review the claim.Which? thinks this is reflective of wider issues in the home insurance market, with policies not making sufficiently clear what is and is not covered, leading to some customers unexpectedly paying out to fix issues.
Right of replies
A spokesperson for AXA Partners, said: “We apologise for the issues Ms Greenley has experienced during her claim. Upon further review, we have settled her claim in full and offered compensation in recognition of the delays. We have notified Ms Greenley of the outcome.”
A LV= General Insurance spokesperson said: “We understand the distress a family experiences when their home is damaged by fire and we do all we can to settle claims and repair damage as quickly as possible. Home insurance policies are typically designed to repair damage on a like-for-like basis so any private work or enhancements to what was previously there can sometimes lead to delays in repair work being completed.
“We have conducted a thorough investigation of this case and are satisfied that the delays were caused by disputes with contractors over additional work that was outside the scope of this claim. In addition, the introduction of a loss assessing firm who engaged their own contractors to quote for the reinstatement works resulted in further delays.“ A payment was issued for the settlement on the buildings reinstatement due to the policyholder not accepting our offer to use LV= General Insurance contractors to repair the property. Payments were also made towards alternative accommodation.”
A spokesperson for Churchill said: “A leak was identified in the mains pipe after a plumber excavated the flooring at Mr Leek’s property. The plumber confirmed the leak was due to wear and tear of the pipe, which is typically excluded under home insurance policies.
“Mr Leek was advised he could claim for the plumber’s investigation, damage caused by accessing the pipe, and any water damage caused by the leak. We requested supporting evidence, including photos and an invoice.“We advised that the damage to the pipe itself would not be covered. Mr Leek reported the issue to Thames Water and asked us to keep the claim open pending its response.
"During a follow-up call, Mr Leek indicated he was unlikely to proceed with a claim. He later confirmed that the leak had been repaired and that he and his neighbours had replaced the ageing shared supply with new piping. He consequently asked us to close the claim.
“If Mr Leek is able to provide further documentation about the repairs to his property, we will be happy to review the claim.”
About Which?
Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.The information in this press release is for editorial use by journalists and media outlets only.