UK regulator expands scrutiny of home and travel insurance claims after Which? super-complaint

The Financial Conduct Authority said insurers must do more to make policies easier to understand and to improve how claims are handled after consumer group Which? filed a rare super-complaint about the home and travel insurance sectors. The regulator acknowledged problems and said it would expand its scrutiny of claims processing and of how clearly policies spell out coverage, while signaling it would hold firms and their senior leaders to account for improvements.\n\nWhich? based its complaint on three areas: how claims are handled, with many outsourced to specialist firms; sales practices that create confusion about what is covered; and a perceived lack of consumer protection by the regulator. The group cited data showing large market size: more than 22 million home insurance policies in force last year with premiums above £7 billion, about 900,000 claims paid totaling around £3.2 billion; and more than 6.8 million travel policies with roughly £1.2 billion in premiums and about 600,000 claims paid of more than £400 million. The FCA’s review found that in 2024, 99% of motor claims were accepted, compared with 80% of standalone single-trip travel claims and 74% of home-content-only claims, a gap it attributed at least partly to lower consumer understanding of what policies cover.\n\nGraeme Reynolds, director of competition at the FCA, said the regulator would "expand our existing workplan" to ensure improvements to the claims process and to consumer understanding of cover. "We will continue to hold firms and their senior leaders to account for making improvements, to help build trust and make sure people get fair value insurance," he said.\n\nThe Association of British Insurers, which represents insurers, said improvements demanded by the FCA were a top priority for the sector.\n\nRocio Concha, Which?, director of policy and advocacy, said the FCA must now deliver meaningful change for consumers and stamp out widespread bad practice. "These issues have festered for years, so the FCA must now seize the opportunity to take strong action to stamp out widespread bad practice and issues with how the markets are working," she said.\n\nJames Daley, managing director of consumer group Fairer Finance, said the FCA's response would be unlikely to address the many and growing problems in this sector, arguing that the insurance market is in a race to the bottom on price—leading to hollowed-out products and poorer claims experiences.\n\nWhich? and other consumer groups welcomed the regulator's stepped-up oversight but urged stronger, more systemic action to reform how home and travel insurance markets work.\n\nThe FCA said it had already addressed some concerns, but consumer groups argued for more action. The regulator said the expansion of its oversight was a first step toward broader reform that could reshape how insurers sell and settle claims and how clearly policies describe what is and is not covered.\n\nThis development comes as insurers face ongoing scrutiny amid debate over affordability and product quality in the wake of rising living costs.\n\n\n\n