Which? responds to FCA fair value insurance measures
Rocio Concha, Which? Director of Policy and Advocacy, said:
"At a time when many insurance customers are paying sky high premiums amid the worst cost of living crisis in decades, these figures clearly demonstrate that parts of the market aren't providing value for money for consumers.
"It is very concerning to see that payouts for Guaranteed Asset Protection are sitting at 6 per cent of what these firms take in premiums - despite the regulator raising concerns about value for money almost a decade ago. With consecutive summers of disruption, and what were once thought of as extreme weather incidents becoming more frequent, good quality travel and home insurance has become even more important - yet customers with these products face some of the lowest claims acceptance rates.
"The FCA has left firms in no doubt over their obligations to their customers, and failure to meet deadlines set for improvements must result in immediate action by the regulator."
-ENDS-
Notes to Editors
The FCA launched its first ever market study into competition in the insurance market a decade ago after concerns about the mis-selling of insurance products sold as add-ons, such as Payment Protection Insurance, identity theft protection and personal accident cover.
In 2014, the regulator concluded that some insurance products, including add-ons and standalone cover, did not offer value for money. For example, for personal accident and Guaranteed Asset Protection add-ons, only around 10% of retail premiums were paid out in claims. However, as these figures today show, problems still persist in the insurance market.