The Financial Conduct Authority (FCA) has recently underscored the need for improved practices in the home and motor insurance sectors. This comes in the wake of an upswing in complaints about insurance claims handling and the treatment of vulnerable customers.
The regulatory review revealed instances where motor insurance customers were offered settlements below the fair market value of their written-off vehicles, a direct infringement of FCA regulations.
The FCA has prompted companies implicated in these practices to rectify these wrongdoings and where appropriate, to offer redress to those affected. In addition to these issues, the review exposed that a number of firms lacked comprehensive systems to monitor customer outcomes effectively. There was also an identified need for improved information sharing among insurers and intermediaries involved in claims settlement.
A particular area of concern was that several companies appeared deficient in identifying customers who were vulnerable and in need of extra assistance. However, the FCA review was not solely focused on the negatives, but also brought to light instances of good practice within the sector. There were firms who demonstrated greater leniency, waiving fees and setting up dedicated customer support hubs.
Responding to these findings, Sheldon Mills, the FCA’s executive director of consumers and competition, said, “Timely and fair claims handling is especially vital during the cost of living squeeze. While we have seen many firms treating their customers correctly, we found too many examples of customers not receiving the service they’re entitled to. Where we found issues, we’ve told firms to put them right. We’ll be monitoring them to ensure they do.”
This recent review forms a part of the FCA’s wider strategy to enhance consumer outcomes and encourage higher standards across the UK’s financial services sector. To aid this, the FCA has finalised new guidance to provide insurance firms with greater clarity on how they can support their customers, particularly those facing financial hardship.
Keep up with all the latest FinTech news here.
Copyright © 2023 FinTech Global