LONDON – Britain's Financial Conduct Authority (FCA) is investigating whether insurers are dragging their heels in paying out claims for stolen goods or disrupted holidays.
FCA Chief Executive Martin Wheatley said that complaints about insurers were on the rise, with consumer organization Which? reporting that 64 percent of complaints are related to claims.
"I think it is right to dig deeper into figures like these," Wheatley told a meeting of the British Insurance Brokers' Association.
"Very often we are talking about enormously stressful periods in people's lives. Touchstone moments. Someone taken seriously ill on a family holiday; a house burgled; a property flooded."
The FCA was launched last month to help to draw a line under years of financial product mis-selling in Britain and has powers to ban products that rip off customers.
The biggest scandal has been the mis-selling of payment protection insurance on loans, resulting in banks having to pay consumers more than 12 billion pounds ($18.3 billion) in compensation.
"We need to quickly determine - for the sake of both the insurance industry as well as its customers - whether there is case to answer, and that's why we're today launching a strategic review into the claims process," Wheatley said.
The focus will be on household and travel claims, with the review's findings and recommendations due in the final quarter of the year.
The Association of British Insurers said that insurers pay out more than 28 million pounds a day for household and motor claims alone.
"Claims service is the shop window by which the industry is often judged, and insurers are continually looking at how they can provide the best possible service to customers," Maggie Craig, the ABI's director of financial conduct regulation, said. ($1 = 0.6568 British pounds)
(Reporting by Huw Jones; Editing by David Goodman)