FCA: Insurers must put ‘wrongs right’ and are failing the vulnerable in cost of living squeeze
Insurance firms are failing vulnerable customers and need to put “wrongs right” as Brits are hammered by a cost of living crunch, the Financial Conduct Authority has warned today.
In a statement this morning, the City watchdog said home and motor insurers must “improve their treatment of vulnerable customers and how they handle customers claims” after it found an uptick in complaints about insurers.
Lengthy complaints handling times and meagre settlements for claimants were among the key complaints to crop up, the FCA said.
“The regulator discovered instances of motor insurance customers being offered a price lower than their car’s fair market value after it had been written off, which is against FCA rules,” the regulator said.
“Relevant firms have been told to put these wrongs right and where necessary provide redress to affected customers.”
The review from the watchdog found that some firms were unable to show they were properly monitoring customer outcomes and better information sharing was needed with middle-men claims intermediaries in the industry.
The FCA’s consumers and competitions chief Sheldon Mills warned firms that “timely and fair” claims were needed “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,” he added.
Alongside the review, the FCA has issued new guidance for insurance firms about how they should support their customers and identify customers who are in financial trouble.
The warning shots from the watchdog comes after the Bank of England last week told insurers to brace for “claims inflation” and rigorously assess the impact of claims on their solvency.
The BoE said that claims inflation due to factors such as rising wage, medical and raw materials costs is expected to affect all general insurers.