James Daley, managing director of independent consumer group, Fairer Finance comments on the Which? super-complaint to the FCA over insurance market failings:
“We welcome the Which? Super-complaint and hope that the FCA will take this as an opportunity to go back to the drawing board. Insurance provides essential protection for millions of consumers, but the market is not currently working. While comparison sites have helped create price competition, they have also accelerated a hollowing out of products and services - meaning many consumers buy policies that don’t meet their needs. Many more find themselves let down by poor claims handling - as there are no easy ways to work out which companies can be trusted.
“The insurance market too often lets customers down. Its products are complex - and insurers and comparison sites don’t do enough to help match people together with products that meets their needs. Worse still, insurers’ approach to claims handling varies enormously - with some firms putting too much emphasis on containing costs rather than looking after their customers.
“The FCA has only recently finished a number of studies looking at this market - and while it acknowledged a number of failures, it seems to have no appetite to tackle these.
“We need to work on building an insurance market that is trusted and valued by consumers. That will require new rules, and a tougher enforcement of Consumer Duty. It’s important that the FCA is not cowed by the government’s deregulatory agenda. A trusted insurance industry underpins financial stability and is crucial if we are to return the economy to growth.”