Motor Insurance Leads the Pack in Customer Complaints

Motor Insurance Tops Complaint ListIn the final quarter of 2024, motor insurance emerged as the most complained-about product in the UK, with nearly 3,600 grievances filed to the Financial Ombudsman Service (FOS). This insight comes from the latest research by market intelligence firm, Insurance DataLab.While this figure represents a decrease from the 4,000 complaints recorded during the same period in 2023, motor insurance still accounted for nearly one-third of all complaints received.Top Five Insurance Categories Under ScrutinyFive key insurance categories combined to make up almost 70% of all general insurance complaints submitted to the FOS in this timeframe. Following motor insurance, buildings insurance generated over 1,700 complaints, constituting 16% of the total.Ranking third was travel insurance, with 1,100 complaints, or 10% of the total. Pet and livestock insurance followed with 600 complaints (6%), and private medical and dental insurance rounded out the top five with 550 complaints, representing 5% of the total.Complaint Volumes and Upheld RatesWhile the complaint volumes offer insight into consumer dissatisfaction, Insurance DataLab’s findings also emphasized the proportion of cases upheld in favor of consumers—an essential measure of insurer performance.Motor, pet, and buildings insurance each had an upheld rate of 41%, surpassing the industry average by five percentage points. Notably, some other insurance lines exhibited even higher upheld rates. Guaranteed Asset Protection (GAP) insurance led with an upheld rate of 53%, closely followed by building warranties at 52%.Furthermore, commercial vehicle insurance (49%), commercial property insurance (47%), and motor warranties (46%) also reported elevated upheld rates.Regulatory Implications and AdviceCo-founder of Insurance DataLab, Matt Scott, noted that insurers with high complaint volumes and upheld rates could face increased regulatory scrutiny in the coming months. “Those insurers that deliver strong underwriting profits but also generate high complaint volumes and high upheld rates are likely to attract closer regulatory oversight,” Scott stated.With the Financial Conduct Authority (FCA) anticipated to adopt a more interventionist approach, Scott emphasized the importance of firms benchmarking their performance and identifying emerging issues before they intensify.