FCA warns insurers over treatment of vulnerable customers
By Josh White
Date: Monday 03 Jul 2023
(Sharecast News) - The Financial Conduct Authority (FCA) issued a warning to home and motor insurers on Monday, urging them to improve their treatment of vulnerable customers and enhance their claims handling processes.
In response to a surge in complaints regarding insurance claims, the FCA conducted a review that revealed instances of lengthy complaints handling times and inadequate settlements.
The investigation uncovered cases where motor insurance customers were offered an amount below their vehicle's fair market value after it had been declared a write-off - in violation of FCA regulations.
Relevant firms were instructed to rectify these shortcomings and provide appropriate redress to affected customers.
Additionally, the review highlighted the insufficiency of some firms in monitoring customer outcomes effectively.
It also emphasised the necessity for improved information sharing when insurers collaborate with intermediaries to settle claims.
Further, the FCA said it found that certain companies failed to demonstrate their ability to identify vulnerable customers who require additional support.
In response to its findings, the FCA said it was taking action against firms that have violated its rules.
The regulator advised customers who had experienced claim delays or were dissatisfied with their claims handling to contact their insurance company and raise a complaint.
Alternatively, customers could approach the Financial Ombudsman Service if they found the firm's response unsatisfactory.
"Timely and fair claims handling is especially vital during the cost of living squeeze," said Sheldon Mills, the FCA's director of consumers and competition.
"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."
Reporting by Josh White for Sharecast.com.
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