The U.K.’s Financial Conduct Authority (FCA) criticized the insurance industry for “poor practices” and “significant” failures in handling claims for small and medium-sized companies.
The regulator said a review of the experiences of business customers showed more dissatisfaction with insurers than a similar survey last year had found among consumers. The FCA cited cases where policies were inadequate to cover losses, delays in visits by loss adjusters, lack of clarity over who was responsible to resolve a claim and poor communication.
“It is vital that claims are taken seriously and processed promptly,” Linda Woodall, the FCA’s acting director of supervision, said in a statement on Friday. “We expect all firms to carefully analyze the findings of the review and make any necessary changes to their approach to ensure that SME claimants are treated fairly.”
The FCA reviewed 25 firms, including five insurers, 10 insurance intermediaries and 10 firms that assess losses. It also surveyed the claims experiences of 100 companies with a focus on claims of more than 5,000 pounds ($7,800). It didn’t name any of the firms.
The regulator said it plans to engage with firms and relevant trade bodies to discuss the findings and the changes required to improve service.