FCA review shows 'poor' insurance claims service

The FCA launched a thematic review into claims handling for SMEs because of the vital role that small businesses play in the health of the UK economy. Whilst SMEs’ insurance needs can be relatively complex our review found that they are also less likely to be sophisticated customers and many have similar knowledge and experience to retail consumers when buying general insurance products.

The FCA assessed 25 firms involved in the settlement and management of claims, and looked specifically at claims over £5000. Numerous examples of poor practice were found, such as delays in visits by loss adjustors, a lack of clarity in who was responsbile for driving claim outcomes, and confusion over the steps in the claims process.

Linda Woodall, acting director of supervision at the FCA, said:

“In an area where any delay could have a serious impact on a business or someone’s livelihood, it is vital that claims are taken seriously and processed promptly - that means putting customers at the very heart of the process.

“We expect all firms to carefully analyse the findings of the review and make any necessary changes to their approach to ensure that SME claimants are treated fairly.”