The UK Financial Conduct Authority (FCA) has announced that it would take action against home and motor insurers over their failure to provide improved services to their customers.
The regulator has also asked the insurers to enhance their treatment while handling customer claims.
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These observations came after a review of the sector, which has seen an increase in complaints regarding insurance claims.
In the review, the FCA found instances where the handling of complaints took extensive durations and people were deprived of appropriate settlements.
It was also found that motor insurance clients were offered a price less than their car’s fair market value after it had been written off, which contradicts FCA rules.
The regulator also asked the relevant companies to rectify their mistakes and offer compensation to affected customers if required.
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By GlobalDataThe review also revealed that some insurers were not able to supervise customer outcomes in a desired way and improved information sharing was necessary for insurers to handle intermediaries while settling claims.
Furthermore, some companies were unable to show their capability to identify vulnerable customers who need extra support.
The FCA will act against companies who have breached its rules and asks clients to talk to their insurance provider to raise complaints.
Customers can also lodge a complaint with the Financial Ombudsman Service in case they are dissatisfied with the response of their insurers.
However, the FCA in its review found multiple examples of good practices such as companies offering greater forbearance, waiving fees or excesses, and payment holidays, among others.
FCA Consumers and Competition executive director Sheldon Mills said: “Timely and fair claims handling is especially vital during the cost of living squeeze.
“While we have seen many firms treating their customers correctly, we found too many examples of customers not receiving the service they’re entitled to.
“Where we found issues, we’ve told firms to put them right. We’ll be monitoring them to ensure they do.”
