Insurance Times analysis of Financial Ombudsman Service data reveals the insurance firms with the greatest proportion of complaints resolved in the customer’s favour for the first half of 2018
The ‘Beast from the East’ was blamed by those poorest performing insurance firms for their complaints response record in the first half of 2018.
Of the main insurance firms, Ambant Underwriting had the greatest proportion of general insurance complaints referred to Financial Ombudsman Service (FOS) subsequently upheld in favour of the customer in the first half of 2018.
The Davies Group-owned MGA had 54% of customer complaints upheld, ahead of British Gas Insurance, with 50% of claims upheld.
But a spokesperson for Ambant said it’s position in the table misrepresented its complaints record, as it is an insurance company that does not handle a high volume of claims.
| Business | Upheld GI complaints - 2018 H1 | 2017 H2 | 2017 H1 |
|---|---|---|---|
|
Ambant Underwriting |
54% |
- |
- |
|
British Gas Insurance |
50% |
41% |
48% |
|
Lloyds Bank General Insurance |
49% |
33% |
28% |
|
Liberty Mutual |
49% |
41% |
39% |
|
RAC Insurance |
49% |
39% |
33% |
|
Telefonica Insurance |
49% |
58% |
44% |
|
DAS |
48% |
37% |
36% |
|
Haven Insurance |
45% |
- |
- |
|
Mapfre Asistencia |
43% |
47% |
45% |
|
Ageas Retail |
40% |
30% |
43% |
|
BISL |
39% |
29% |
16% |
|
Great Lakes Insurance |
39% |
26% |
- |
|
Saga Services |
39% |
35% |
22% |
|
AXA UK |
38% |
36% |
33% |
|
Domestic & General |
38% |
36% |
48% |
|
IGO4 |
38% |
48% |
51% |
|
Legal & General |
38% |
39% |
30% |
|
Markerstudy |
38% |
22% |
33% |
|
Skyfire Insurance |
38% |
43% |
49% |
|
Lloyd’s |
36% |
34% |
32% |
The spokesperson added: “We take complaints very seriously and have a low overall ratio compared to our peer group.
“The data published by the ombudsmen relates to one particular client, which experienced a spike in claims during the ‘Beast from the East’ storm in February 2018.
“Clearly this one-off incident involving a small number of cases disproportionally affected our overall performance, which drove us within the scope of the ombudsmen data for the first time.“
Dissatisfied
Complaints are referred to the ombudsman service when the consumer is dissatisfied with the business’s response to their complaint.
It is the first time Ambant has featured in the ombudsman’s half-yearly listings, which require a minimum of 30 cases resolved and 30 new cases within that period to be included. This makes up around 90% of complaints received.
DAS placed as the seventh worst firm for responding to customer complaints with 48% upheld. Like Ambant, this was put down to problems caused by the ‘Beast from the East’.
It said the poor weather generated a very high demand for its home emergency product and that service levels were strained.
Since the number of cases reduced to more normal levels, DAS said the number of complaints upheld is running close to the industry average of 31%.
And DAS added that the 48% of complaints upheld related to 36 cases. The legal expenses insurer said it was important to place this number in the context of its 11m customers.
A spokesperson for DAS said: “Of these 36 cases, only half involved the ombudsman overturning the original decision by DAS. The balance involved the ombudsman recommending a relatively small increase in compensation we had previously offered.”
And they added: “We always look to learn from any complaint we receive, including feedback from the ombudsman and continually look to improve our products and services based on those learnings.”
Across all general insurance complaints referred to the ombudsman, an average of 31% were upheld – largely in line with the industry average for the first and second halves of 2017.
New cases
But the first half of 2018 showed a significant increase in the number of new cases referred to the ombudsman – a trend which could also in part be attributed to the poor weather.
New complaints about general insurance increased in the first half of 2018 by 15% to 20,260 from 17,608 in the second half of 2017.
Within the top 20 worst performing insurance firms for its complaints response there was a 24.6% increase in new cases referred to the ombudsman compared with the second half of 2017.
When compared against the first half of 2017, there was a 3.8% increase in new cases, demonstrating a how more cases are presented to the ombudsman at the start of the year when the weather is poorer.
It would explain why British Gas Insurance saw a 124.6% increase in the number new cases received by the ombudsman between the second half of 2017 and the first half of 2018.
But it still saw a 65.3% increase in new cases compared to H1 2017. This meant British Gas Insurance had the greatest percentage increase in new cases against both half-yearly comparisons.
And it placed as the second worst performer at handling complaints, with 50% upheld by the ombudsman.
Liberty Mutual ranked joint third in the worst performers list, with 49% of cases upheld, but was one of only three on this list to see the number of new cases fall from the second half of 2017.
When contacted about their placing, Liberty disputed the figure, stating that the FOS incorrectly allocated 26 resolved cases to a third party which distributes a product on behalf of Liberty. It stated with these cases, it the percentage upheld falls to 30%.
In response, a spokesperson for the FOS said: “Before we release our data publicly we share the figures with each company, so they can raise discrepancies and we can address the issues together.
“We didn’t hear from Liberty during this time but if they are not happy with the way we’ve allocated the cases or have any questions they should get in touch with us.”
Best performers
At the opposite of the spectrum, AIG Europe was the best performing insurer on its response to customer complaints, with just 6% of those referred to the ombudsman upheld.
The insurer didn’t feature in the listings for the second half of 2017, but its figure of 6% was a strong improvement on H1 2017, when 27% of complaints were upheld.
This was the biggest improvement recorded between H1 2017 and H1 2018.
| Business | Upheld GI complaints - 2018 H1 | 2017 H2 | 2017 H1 |
|---|---|---|---|
|
AIG Europe |
6% |
- |
27% |
|
Autonet Insurance |
12% |
- |
19% |
|
CIS General Insurance |
14% |
18% |
23% |
|
Esure Insurance |
15% |
17% |
17% |
|
BUPA Insurance |
19% |
26% |
28% |
|
Eldon Insurance |
20% |
24% |
32% |
|
Covea Insurance |
22% |
23% |
20% |
|
Zurich Insurance |
22% |
16% |
18% |
|
UK Insurance (Direct Line Group) |
22% |
22% |
25% |
|
LV= |
23% |
21% |
22% |
|
Pinnacle Insurance |
25% |
28% |
20% |
|
Tesco Underwriting |
25% |
29% |
33% |
|
MCE Insurance |
25% |
- |
40% |
|
NFU Mutual |
25% |
12% |
22% |
|
Royal London Mutual |
26% |
15% |
22% |
|
Sabre Insurance |
27% |
28% |
33% |
|
Advantage Insurance |
28% |
34% |
30% |
|
Admiral Insurance |
28% |
28% |
27% |
|
Aviva Insurance |
30% |
32% |
32% |
|
Zenith Insurance |
30% |
32% |
30% |
|
AVERAGE |
31% |
30% |
31% |
Paul Crutchlow, head of customer relations, UK at AIG said he was proud of the insurer’s customer relations team for achieving such a strong result.
He said the result was built on a “genuine customer-centric working environment” where decisions are considered from the customer’s viewpoint, and explained how AIG uses customer complaint data to learn from and adapt its complaint response.
He said: “Where complaints occur, AIG operates a Complaint Champion network across all key business lines.
“These are individuals who receive a high level of training in handling customer complaints, thereby empowering the front line to resolve customers concerns as early as possible.
“Where a customer complaint cannot be resolved quickly by the front-line staff, it is immediately referred into a central team of complaint handlers.
“The customer relations team is formed of subject matter experts who have a wealth of industry knowledge, with particular detailed understanding of Financial Ombudsman decisions.
“Through this team of experts, we reflect our commitment to placing the customer front and centre of our business by achieving fair, balanced and reasoned outcomes.”
Forums
The insurer holds regular formal complaint governance forums where key business areas meet to discuss, agree and oversee the implementation of any changes to process or procedures where required.
Other strong performers were Autonet, CIS and Esure, all of which similarly posted strong numbers well below the industry average for upheld complaints in H1 and H2 of 2017.
Esure had only 15% of complaints upheld by the ombudsman for the first half of 2018, and only 17% upheld in both halves of 2017.
Gaynor Leeves, head of customer relations at Esure, said the firm is proud of its strong performance rating and that it demonstrated how they are delivering fair outcomes for customers.
She said their consistent success with the ombudsman was thanks to a policy of sharing any learnings with the wider business to drive positive customer change.
“We always make sure the customer has a voice and I am actively involved in product reviews and changes to policy wording, making sure that the learning we’ve seen as a result of complaints is taken into account.
“Our customer relations specialists are customer focused, experienced, and are empowered to challenge internally and reach independent decisions.
”Each member of the team takes pride in their work and presents the information behind each complaint as clearly as possible to the FOS – we set out the facts simply so they are easy to understand providing a complaint summary, listing all the key facts, what’s been considered and their rationale on how a decision has been made.”
Transparent
When the FOS does become involved, the insurer says it maintains an efficient process, with no internal handover. Leeves said that applicable files will be sent without the need for further review.
She added: “It’s important to us that all our decisions are fair, transparent and in line with the ‘spirit’ of our policy.”
Of the top 20 performers there was a 3.6% increase in new cases compared to H2 2017 and a 0.1% decrease compared to H1 2017.
It demonstrates that for those firms best at handling customer complaints, there is also a declining number being referred to the ombudsman.
In the top performers list Zurich saw the biggest fall in new complaints between 2017 H2 and 2018 H1, with a 32.4% drop. Compared against 2017 H1, Zurich had the second biggest drop in new complaints – 34.2% down, with only Pinnacle Insurance posting a better percentage point improvement (61.7%).
UK Insurance Limited (part of Direct Line Group) continues to be the company with the most new cases referred to the ombudsman, but its consistent showing at an above average 22% resolved rate shows it is still one of the stronger performers in its complaints response.
| Top five individual businesses with the most general insurance complaints (with upheld rate) | |||||||
|---|---|---|---|---|---|---|---|
|
Business |
2018 H1 |
2017 H2 |
2017 H1 |
2016 H2 |
2016 H1 |
2015 H2 |
2015 H1 |
|
UK Insurance Limited (Direct Line) |
1544 (22%) |
1387 (22%) |
1447 (25%) |
1233 (27%) |
1307 (31%) |
1290 (40%) |
1536 (35%) |
|
Aviva |
1197 (30%) |
916 (34%) |
1051 (35%) |
728 (31%) |
639 (30%) |
472 (28%) |
466 (31%) |
|
RSA |
840 (31%) |
602 (33%) |
622 (24%) |
695 (27%) |
487 (23%) |
455 (27%) |
455 (25%) |
|
AXA |
723 (38%) |
556 (24%) |
623 (33%) |
561 (30%) |
516 (35%) |
429 (38%) |
636 (42%) |
|
Ageas |
715 (30%) |
597 (36%) |
773 (32%) |
641 (37%) |
593 (37%) |
499 (40%) |
493 (38%) |
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