September 26, 2012

Insurance Times has been ploughing through the FSA’s latest statistical digest of complaints and complainers, and decided that an increasing number of them relate to insurance brokers.

Or, at least, they might do. Complaints about general insurance and pure protection products during the first half of 2012 accounted for over 70% of a total 3.5 million complaints about financial services providers. But most of the GI ones related to products sold by banks rather than GI intermediaries – PPI in particular.

But the 431,897 complaints made against GI intermediaries in the first half of this year was almost double the 246,250 recorded in the same period last year – and 42% of these were upheld.

Complaints against insurance GI intermediaries have been steadily creeping up since 2009, Insurance Times worries. Either that or the GI intermediaries in question have been writing them down more often.

But “the FSA figures on redress paid to consumers are jaw-droppingly bad for brokers,” Insurance Times insists, with GI intermediaries paying “£145.9m to consumers since 1 August 2009, when the FSA rejigged its complaints procedure.” That’s enough to get rid off those Swinton directors 52 times over!

The paper admits, however, that the exact degree of jaw droppage involved is a little hard to gauge since “the FSA counts about 6,000 firms in the ‘general insurance intermediary’ category, many of which sell insurance as a secondary service,” and “unfortunately, the FSA complaint statistics do not distinguish between the two, so the true proportion of blame is uncertain.”

In other words, we have little or no idea what these latest FSA stats tell us about brokers.

Undaunted, however, Insurance Times does not hesitate to spell out the inescapable question all UK brokers must ask themselves today: “What is the truth behind these figures?”


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