Which? launches super-complaint against 'broken' insurance industry

Which? has filed a super-complaint against the UK insurance industry, arguing that the home and travel insurance markets are broken and that consumers are being harmed by practices across the sector. The action, initiated by a consumer advocacy body on behalf of customers, is an increasingly rare step used when a large number of people are believed to be negatively affected. The group says failures span how claims are handled, how policies are sold, and whether regulators are providing adequate protections.

Which? points to a string of cases and data illustrating the problem, including examples where insurers initially refused to pay for a cancelled holiday on the basis that the trip had technically started before a flight was turned back after two hours. The watchdog noted that acceptance rates vary by product, with car insurance claims historically rising to the top, while buildings and travel claims appear more prone to denial or delay. In its analysis, Which? cited an estimate that around 30 million people hold buildings and contents policies, with a similar number purchasing either annual or single-trip travel cover last year. The group said car insurance claims are almost universally upheld, at 99%, but buildings insurance claims are accepted in about 63% of cases, and travel insurance claims in around 80%.

One high-profile example highlighted by Which? involved Yvette Greenley, whose flight from Luton to Egypt was turned back due to technical issues. The airline refunded the ticket, but the insurer initially refused the £140 claim for accommodation and travel to and from the airport because the holiday had been considered to have begun. Greenley said she felt overwhelmed and dismissed, noting that the lack of alternatives left her with little option but to cancel. She ultimately received an apology and a settlement from the insurer. The case underscores the broader concerns Which? raises about how insurers assess and pay out on claims.

The super-complaint identifies three core areas of concern. First, it questions how many claims are outsourced to specialist firms and how that outsourcing affects claims handling, timeliness, and decision-making. Second, it highlights sales practices tied to policy wording and coverage disclosures, arguing that customers are often left confused about what is and isn’t covered. Finally, Which? accuses the Financial Conduct Authority (FCA) of failing to provide adequate consumer protections, arguing that regulators have not kept pace with the market’s complexities. The action has drawn support from independent consumer group Fairer Finance, whose managing director James Daley said the FCA has begun studies of the market but has yet to tackle the underlying problems decisively.

Rocio Concha, Which?’s director of policy, described the issues as serious failings that have been tolerated for too long by both industry players and the regulator. “We have heard heartbreaking stories from people who have found the experience of dealing with an insurance company worse than the distressing life events that led to their claim,” she said. She added that the super-complaint represents “a major intervention” and that it is meant to prompt urgent action.

A spokesman for the FCA said the regulator would respond to the super-complaint in due course and noted that its focus has been on raising standards across the market. “We uncovered issues when we recently reviewed insurers’ home and travel claims handling. We’ll be holding them and their senior managers accountable for the changes needed,” the FCA said, adding that concerns include outsourcing arrangements and storm-definition disputes.

The Association of British Insurers (ABI), which represents insurers, defended the industry, saying members work hard to ensure policyholders understand their coverage and to pay out claims promptly. A spokesperson pointed to figures from the first half of this year, saying insurers paid out more than £1.7 billion for over 300,000 home insurance claims, and that travel insurers paid out £472 million across more than 500,000 claims last year. The ABI said it would continue to work with the regulator to deliver good outcomes for customers and would engage with Which? to understand the concerns raised.

The super-complaint arrives amid ongoing discussion about the insurance market’s structure and the balance of protections afforded to consumers. Regulators have long monitored disputes over whether insurers properly define thresholds for events like storms, as well as how medical or safety nuances are treated in absence of clear policy provisions. Critics say the complexity of modern policies can obscure coverage, leaving claimants unsure of what is recoverable. Proponents of reform argue that clearer disclosures, better claims-handling standards, and tighter oversight could reduce delays and disputes.

In broader coverage, BBC News has reported a number of cases highlighting perceived gaps in insurer practices, including disputes over storm definitions and repatriation decisions for injured travellers. These cases have contributed to a perception among some consumers that the system treats claims differently than the events that prompted them in the first place. The super-complaint therefore arrives at a moment when policymakers and industry participants are under intensifying pressure to demonstrate tangible improvements in how claims are evaluated, processed, and paid.

The 90-day response window required by law adds urgency to the process, with Which? and its allies hoping the regulator will move quickly to address identified failings and implement reforms that reduce the likelihood of repeated disputes and distress for policyholders. Whether the industry will embrace changes voluntarily or under regulatory direction remains to be seen, but the super-complaint signals a shift in how consumer groups pursue accountability in the insurance market.