Complaints to the Financial Ombudsman Service
Figures from the Financial Ombudsman Service have revealed that Direct Line Group, via the business name UK Insurance, was the most complained about provider in the first half of 2017. The insurer received 1,447 new general insurance complaints during the period. These complaints exclude PPI. Aviva was the next most complained about with 1,051 followed by Ageas (773), Axa (623) and RSA (622). The figures show the total number of complaints but do not take into account the size of the business nor do they compare the numbers of complaints against the number of policies sold.
However, when we did our own calculation of number of claims against premium income, Ageas would appear to the the worst performer, followed by Direct Line, AXA, Aviva and RSA. Obviously, Direct Line deal direct with customers exclusively but all of the others named have direct arms. We must confess to being surprised by Ageas’ apparently poor showing as we have dealt with them for some years without experiencing any significant issues.
The Ombudsman noted in a statement that across the entire financial services sector it took on a total of 170,000 new cases in the first six months of this year. The Ombudsman reported: “This represents a 13% increase in complaint figures when compared to the last six months of 2016 – and reflects rises in almost every product sector including PPI and banking.” Almost two thirds of the complaints it received in the first six months of this year came from just 10 businesses – the majority of which are banks.
PPI continued to be the most complained about product with almost 90,000 complaints – making up over half of all complaints to its service. Last year the ombudsman said PPI complaints accounted for half of its workload. However, a slight fall in PPI complaints was recorded in the first half of 2017. Please note that no general insurance broker sold PPI, although our fees to the Financial Conduct Authority include a surcharge for the cost of dealing with it.
The average uphold rate (where the ombudsman found in the consumer’s favour) for all businesses over the six-month period was 36% – and ranges from 3% to 79% across the individual businesses. So, only just over a third of all complaints were upheld. Our view of the reason for this is that more people are buying via online providers without guidance from an insurance broker; they don’t always understand what they are buying; they have nobody on their side when there is a problem.
Our message – as ever – is to always use an insurance broker. We can look at a range of options for you and provide advice on the pitfalls to avoid.