Insurance – The Super-Complaint and the Changing Landscape
In the past, Complaint Handling was seen as a non-specialist role. Complaints staff were often given minimal training and worked off strict scripts in responding to customers . Luckily for both consumers and the industry, that’s not true any more, and hasn’t been for some time.
There’s an increased sense of responsibility in the Financial Services sector along with a commitment to keeping up to date with regulatory requirements – post Consumer Duty especially, so many of our clients have rethought their Complaints approach and are investing in expert Complaint professionals and in extensive training on both the complaints process and the products/services being complained about.
This was something I had observed in many of the businesses I work with and had discussed in conversations with professionals across all levels of the Complaints world – so it was at the forefront of my mind when news broke last week of Which?’s super-complaint against the Insurance sector.
To quickly recap, Which? is alleging that the home and travel insurance sectors specifically are “broken” and failing consumers on a large scale. The first of their three key accusations is that sales practices in the sector are confusing and “inappropriate” – but the other two both relate to Complaints and Consumer Protection. They posit that the FCA is not doing enough to protect consumers and that many complaints are being handed off to non-specialist handlers, who do not have the insurance knowledge necessary to make good, informed decisions. We can speculate that customers not getting the right outcome on their initial complaint could be in turn leading to more complaints needing to be escalated to the Ombudsman. Decisions are being made on what Which? describes as “bizarre policy technicalities” as part of a “shoddy claims service”.
One case they highlighted was a customer whose holiday was ended by their flight being turned around after 2 hours – and her insurer initially responded to her claim by saying her holiday had “technically” taken place so they wouldn’t cover her accommodation and ground transport costs. Another case spotlighted in the super-complaint involves two customers whose home insurance had failed to have their home properly repaired after a fire almost two years ago – leading to multiple complaints escalated to the Ombudsman.
Which? also raised concerns about the use of cash settlements, aligning with an FCA report suggesting that some firms may be opting for cash payments – rather than direct repairs or replacements – in order to “curtail their own costs”.
Super-complaints are rare so this one has understandably garnered extensive mainstream press coverage – which means regardless of the FCA response (which must happen within 90 days of the complaint being lodged), I think we’re almost guaranteed to see a spike in both new complaints and in previous complaints decisions being contested. From my own work, I know that regulators are already scaling up their resource in relation to this issue – I think whatever the outcome, this is going to be one of the defining themes of the Complaints space over the next 12 months.
While we wait to see how the regulator reacts, one thing I think any business in insurance can do right now is invest in quality Complaints talent. Kind Consultancy are specialists in this area, and I may have personally overseen multiple large-scale Complaint Handler recruitment projects for clients already this year. That means I’m close to the marketplace, and have a good knowledge of the talent that is available, and of what businesses need to do to secure it.
If you’re interested in a confidential conversation about how I may be able to help with your Complaint Handling resource needs, get in touch via 0121 643 2100 or on francesca@kindconsultancy.com
