FCA chief executive Martin Wheatley announced the plans in a speech at the British Insurance Brokers’ Association conference earlier today.
Wheatley said: “We know complaints about insurance products are on the rise. We know these complaints are more likely to be upheld in favour of the customer than ever before.
“Significantly we know the large majority of these complaints – 64% according to Which? – are directly related to claims.”
Wheatley said her believes the FCA must address public concerns that policy holders might be facing delays, poor customer service or having perfectly valid claims unfairly declined.
Wheatley continued: “Very often we are talking about enormously stressful periods in people’s lives.
“It would be very difficult, if not impossible, to defend any company if it was found to be aggravating these experiences by dragging its heels – or trying to wriggle out of its responsibility to pay legitimate claims.
“We buy insurance for peace of mind. Not for a painful scrimmage with insurers.
“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.”
The review will look at themes across the general insurance market but with a particular focus on household and travel claims.
The FCA will conduct the review in partnership with firms, as well as consumers and Wheatley said the regulator would try to obtain evidence directly from claimants on how they have been treated.
Wheatley also warned that the review could lead to a review of the existing rules and frameworks should the insurance industry not put its house in order.
He said: “In the long run, the review might mean we revisit our rules. But what I’m asking today, and what I’d prefer, is for firms to revisit their culture. Is your claims’ culture fit for purpose in the modern world?”
Findings and final recommendations from the review are expected by the last quarter of 2013.
