In December 2025, the Financial Conduct Authority (“FCA”) published its formal response to a super-complaint lodged by consumer champion Which?, concerning persistent consumer harm in the UK home and travel insurance markets. The response outlines the FCA’s analysis and actions taken to date and expanded interventions that aim to improve outcomes for policyholders.
Super-Complaints and Insurance Market Concerns
A super-complaint is a statutory mechanism that enables designated consumer bodies to escalate concerns to the FCA regarding features of a financial services market that are significantly harming consumers. Which?, as one such body, submitted its complaint on 23 September 2025, asserting that the home and travel insurance sectors were failing customers across multiple dimensions, particularly in claims handling, product sales practices and enforcement of consumer protection rules.
The complaint cited FCA data showing lower average claims acceptance rates and rising volumes of complaints in these sectors. It also alleged that the regulator had not taken sufficient action, despite being aware of long-standing concerns.
FCA’s Assessment of Market Outcomes
In its response, the FCA acknowledges that, while most consumers report satisfaction with claims outcomes, certain metrics indicate that insurers could be doing better. The Regulator identified that:
- Home and travel insurance products consistently have lower claims acceptance rates than many other insurance types, partially due to consumer understanding issues;
- Data from complaints and Financial Ombudsman Service (“FOS”) findings showed performance deteriorated up to 2024, prompting earlier work on claims handling; and
- Oversight of outsourced claims handlers and management information reporting were among the areas requiring improvement.
While the FCA disagrees with some of Which?’s legal and analytical conclusions, it accepted that further action is necessary.
Regulatory Actions and Expanded Work Programme
The FCA has set out a series of completed, ongoing, and new actions to address issues raised both in the super-complaint and through its own supervisory work. Key focus areas include:
- Claims Handling Improvements
- Launching enforcement investigations into two insurers for potential failings;
- Commissioning independent reviews (under Section 166 of the Financial Services and Markets Act 2000) of claims systems and controls at three firms;
- Requiring senior management attestations to strengthen oversight and controls; and
- Requesting insurers to review processes for storm claims and cash settlements..
The FCA has made clear that it will monitor outcomes from these interventions and will hold firms to account if consumer outcomes do not materially improve.
- Sales Practices and Consumer Understanding
Recognising that poor consumer outcomes often start at the point of sale, the FCA is now:
- Analysing how sales processes influence consumer understanding and outcomes;
- Reviewing how firms provide information about coverage and exclusions, including via price comparison websites; and
- Working with industry and consumer groups to share best practices on improving clarity and transparency.
The FCA has also committed to following up on concerns relating to specific policy terms that may contravene FCA Handbook provisions or breach consumer protection law, including the Consumer Duty.
Implications for Compliance Functions
For compliance support teams in insurance firms and related intermediaries, the FCA’s response highlights several priority areas:
- Claims Governance: Strengthening oversight, especially where claims processing is outsourced, including robust monitoring and management information flows.
- Consumer Outcomes Testing: Integrating measures of consumer understanding and outcomes into product governance frameworks to comply with Consumer Duty expectations.
- Sales and Disclosures: Ensuring that sales channels and materials, especially via digital platforms, offer clear, accurate and understandable information on cover, exclusions and claims expectations.
- Data and Monitoring: Capturing and analysing claims acceptance and complaint data holistically to detect and correct systemic issues early.
The FCA has signalled that market-wide interventions may follow if improvements are not evidenced. Proactive compliance measures, robust governance and early remediation are therefore critical.
How Complyport Can Help
Complyport has extensive experience supporting firms in strengthening governance, enhancing compliance frameworks and responding effectively to heightened FCA scrutiny.
We can help your firm in staying up to par with the FCA’s Consumer Duty and wider compliance expectations by:
- Reviewing and strengthening claims handling governance, including oversight of outsourced claims administrators;
- Assessing sales journeys, disclosures and distribution arrangements against Consumer Duty requirements;
- Enhancing management information and compliance monitoring to evidence good consumer outcomes; and
- Preparing for FCA thematic work, supervisory engagement, Section 166 reviews and enforcement-related remediation.
Get in touch to discuss how Complyport can support your compliance journey. Book a meeting with one of our Subject Matter Experts today.
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