Life insurers need to work quicker to handle bereavements, says FCA
By Benjamin Chiou
Date: Friday 22 Nov 2024
(Sharecast News) - The Financial Conduct Authority has urged life insurers to avoid "unnecessary delays" when settling life insurance claims quicker and improve their customer experience.
In its review of industry-wide bereavement claim processes, the financial regulator said firms took between 53 and 122 days on average to process and settle life insurance claims.
The FCA acknowledged that insurers can find it difficult to provide a timely services, given common delays in obtaining information needed to assess a claim, such as medical evidence. Term insurance claims also tend to take longer since claim values are higher and subject to more rigorous checks.
"However, the FCA has found that many firms still have further to go to meet its expectations, particularly in the measurement, monitoring, and delivery of good service outcomes for customers," the FCA said.
Some firms were found to place "unreasonable barriers" in the claims process, such as requiring customers to provide hard copies of evidence. "Although it is up to each firm to decide their risk tolerances for requiring documentation, they should not impose unreasonably restrictive, rigid, or arbitrary administrative requirements on customers that create barriers to them making a claim," the FCA said.
The regulator said it would be engaging with firms to collectively improve customer outcomes and address the findings of its review, and will take action if it doesn't see improvements.
Matt Brewis, director of insurance at the FCA, said firms are expected to offer the right support to help customers at an "intensely stressful" time. "We expect all life insurers to act on our findings and avoid unnecessary delays with claims," he said.
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