Financial Ombudsman Service helps customers with insurance pricing complaints

The Financial Ombudsman Service has regularly heard from customers who feel they have not had a clear explanation for the increase in the price of their insurance. This can limit their ability to make informed choices about what insurance cover they need and can reduce confidence.

While the number of complaints about insurance pricing fell last year, while the cost of living crisis ensues, it is important that customers have confidence in the price of their insurance. In the majority of cases the Financial Ombudsman finds that the insurer has acted fairly, but we have seen some cases where customers still felt that they had not understood the reason for the price quoted.

Over the past three years we have seen complaints about:

• Cases where premiums have gone down which has led people to question whether they were treated fairly in the past.
• Customers questioning the rise in their premium and finding it was raised in error, for example, a previous enquiry about the policy being incorrectly recorded as a claim.
• Premiums quoted being higher than the previous year, even where they have shopped around, including cases on motor insurance where people used their cars less during the pandemic.

To help prevent complaints arising in the first place, we have taken the following actions:

To help businesses resolve complaints with their customers without reference to the Financial Ombudsman Service, we have:

• Published information for customers and businesses on our website outlining our approach on insurance pricing issues;
• Worked with insurers to share what we have learnt from our casework, to help them understand what more can be done to be transparent about pricing; and
• Worked with consumer groups and regulatory bodies sharing insight on our casework, showing how we resolve complaints where things do go wrong, or where communication can be clearer.

The percentage of complaints upheld by the Financial Ombudsman Service has fallen from 29% to 19% between 2019 and 2022.

Rachel Lam, Ombudsman Leader at the Financial Ombudsman Service, today said:

It is encouraging that the number of complaints about insurance pricing went down last year. However, customers need to have confidence in the price of their insurance and how their cover meets their needs. At a time when household incomes are being squeezed, it is vital that customers are clear on why their premium changes and what they are covered for if things go wrong.

If you think you have not been treated fairly by an insurer, you can come directly to us for free and we will see if we can help.

The Financial Ombudsman Service published guidance for consumers on insurance pricing and renewals on its website.

Notes to editors 

Complaint volumes on insurance pricing

Of the complaints we resolved in 2021/22, 19% were upheld in the customer’s favour. The main reason that complaints are not upheld is that the insurer has acted fairly when providing information on the new premium to the customer. Where complaints are not upheld, the Financial Ombudsman Service helps the customer understand what it considers unfair practice to be.

About the Financial Ombudsman Service

The Financial Ombudsman Service was set up by Parliament to resolve individual complaints between financial businesses and their customers on a fair and reasonable basis, as an alternative to the courts. It can look into problems involving most types of money matters from payday loans to pensions, pet insurance to PPI. It is committed to sharing insight and experience to encourage fairness and confidence in financial services.