Consumer group Which? has filed a "super-complaint" against the UK's home and travel insurance sectors, urging the Financial Conduct Authority (FCA) to take enforcement action against firms with low claims acceptance rates and poor customer service.
FCA data showed some insurers are paying out on fewer than half of the claims submitted. Esure and Rentokil accepted only 40–45% of buildings insurance claims in 2023, compared with a market average of 63%. Admiral paid 50–55% of claims on buildings cover and 60–65% on combined buildings and contents policies, against an average of 72%.
In travel insurance, single-trip policies had an average acceptance rate of 76% last year, with annual worldwide and European policies at 77% and 78% respectively. But some providers, including Europ Assistance and Inter Partner Assistance (part of AXA), paid out on just 65% of claims in certain categories. Zurich’s acceptance rate for single-trip policies was 70%.
According to a report from The Sunday Times, ratings agency Fairer Finance said the variations could not always be explained by differences in cover, noting that identical or near-identical policy wordings sometimes produced significantly different claims outcomes. It suggested that firms’ culture and claims-handling practices may play a significant role.
Longstanding concerns over customer treatment
Which? argued that weak regulatory oversight has allowed poor practices to persist for more than a decade. It claimed insurers often fail to communicate adequately with customers, leave claimants in protracted disputes, and create confusion about what policies actually cover.
Rocio Concha, Which?’s director of policy and advocacy, said many insurers are failing to meet their regulatory obligations. She added that the FCA must “reset” the home and travel insurance markets to bring about fundamental change in how customers are treated.
Industry response and wider implications
Insurers pushed back on the interpretation of the data. Esure said its figures included all claims inquiries, even where no cover was in place, making comparisons with the wider market misleading. Rentokil noted that its insurance products are highly specialised which can make valid claims harder to establish. Admiral said it pays all eligible claims, but that many rejected submissions related to events not covered under policy terms.
The super-complaint placed the FCA under pressure to respond with stronger enforcement, potentially leading to new obligations on how firms report claims data and explain policy coverage to customers. While the focus is on home and travel insurance, analysts warned that the findings could prompt wider regulatory scrutiny across other personal lines such as motor, pet, and gadget insurance, where complaints and disputes about exclusions are also common.
For insurers, the risk is that inconsistent claims handling and opaque policy wordings could trigger a broader shake-up in product governance. Tighter oversight may require clearer policy language, improved customer communications, and stronger board-level accountability for claims outcomes - marking a significant shift in how personal lines are sold and supervised, according to the report.
