Will insurance complaints keep rising?

The Financial Ombudsman Service (FOS) said today that it had seen a 12% increase in non-PPI insurance complaints made in the 2012 financial year. So what are the interesting points of the report, and what could this mean for the future?

First, it looks like brokers are the heroes when it comes to insurance complaints, as an FOS spokesman said that most of the gripes were made about insurers.

Motor insurers’ claims handling processes were the largest area for FOS complaints, with significant slabs of cases also made against home and content and travel insurance.

It is also interesting to see the rising number of complaints made in what the FOS sees as emerging areas of insurance, such as card protection insurance and mobile phone cover.

The watchdog does not publish records of these areas, but a spokesman said: “They won’t be directly responsible, in terms of a direct causal link, to that 12% (increase in complaints), but they are certainly a significant contributory factor.”

Stand off between insurers and consumers

Perhaps the most interesting reason for the 12% rise is the change in approach to insurance claims and complaints, from both consumers and insurers.

The FOS said it had seen a more “entrenched” attitude between the two sides, with consumers being more prepared to bring claims and fight their corner, and insurers being more willing to dismiss claims too quickly and without proper investigations.

Insurers are all too willing to point to fraudulent or exaggerated claims, but perhaps keep quiet about the times their own claims handling is substandard, so it is telling to see this pointed out by a neutral body such as the FOS.

The watchdog said it was disappointed that the number of insurance complaints were rising, but if such confrontational attitudes are becoming the norm, is there any alternative?