FCA response to the Which? super-complaint: implications for insurers and regulated firms

When Which? filed a super-complaint on standards in the home and travel insurance markets, as detailed in our earlier briefing on the original complaint, it was not raising isolated examples of poor service. Instead, it was stating that persistent issues in claims handling and customer experience pointed to wider, systemic problems that warranted regulatory intervention.

In December 2025, the Financial Conduct Authority (FCA) published its response. Rather than treating the complaint as a closed chapter, the FCA confirmed it would expand its work across the insurance sector, signalling that the issues raised would be examined as part of ongoing supervision and enforcement activity.

This response did not emerge in isolation. It sits against a backdrop of several years of consistent long-term FOS insurance complaint patterns, visible in Financial Ombudsman Service data over time.

Issues highlighted in the super-complaint

Which? highlighted several concerns relating to consumer outcomes in home and travel insurance, including:

• Delays and poor communication during claims

• Customer understanding of cover at the point of sale

• The handling and outcomes of claims once policies were in force

• Lack of oversight and control of third parties involved in claims administration

• Inappropriate use of cash settlements potentially leaving customers out of pocket

The super-complaint argued that these issues risked causing consumer harm and could not be addressed solely through individual firm remediation or dispute resolution.

How the FCA responded

In its response, the FCA confirmed that it would expand its existing work in the home and travel insurance markets. This included:

• Further scrutiny of claims handling practices

• Increased focus on customer service and communications

• Examination of how firms oversee outsourced and third-party arrangements

• Continued use of enforcement action and independent reviews where weaknesses are identified

The FCA also reinforced that Consumer Duty expectations apply throughout the customer journey, including claims handling, and that firms must be able to evidence fair outcomes in practice.

We’ll be monitoring consumer outcomes and will continue to hold firms and their senior leaders to account for making improvements, to help build trust and make sure people get fair value insurance - Graeme Reynolds, FCA Director of Competition and Interim Director of Insurance

The FCA response makes clear that concerns about poor claims handling, inconsistent decision making, and weak customer communication are not isolated issues. They are being assessed as indicators of whether firms are genuinely delivering fair outcomes in practice, particularly where customers rely on insurers at points of vulnerability or financial stress. The regulator’s focus is not just on individual failures, but on whether firms have the operational controls and oversight needed to prevent repeat harm.

Many of the issues highlighted by Which? map directly to weaknesses in everyday complaint handling frameworks, particularly around communication, categorisation, and root cause correction. These are not new problems, but the FCA response makes clear that they are now being assessed through the lens of outcomes, not intent.

Industry response

The Association of British Insurers (ABI) acknowledged that improvements in claims handling and consumer understanding are needed, while cautioning against characterising the issues as evidence of widespread market failure.

The ABI pointed to the scale of the insurance market and the volume of claims paid each year, arguing that context matters when interpreting complaint data and regulatory findings. They also stressed the importance of assessing complaint data in proportion to the size and complexity of the insurance market.

This contrast reflects a familiar tension within regulated markets: balancing scale and operational complexity with the need to deliver consistent, fair outcomes for customers.

Which? response to the FCA’s findings

Following the FCA’s statement, Which? welcomed the regulator’s decision to expand its work but made clear that it did not consider the issues raised by the super-complaint to be resolved.

Which? said the FCA’s response reinforced the seriousness of the concerns it had raised, particularly around claims handling standards, customer understanding of cover, and the experience of consumers once a claim is made. It also emphasised the need for sustained regulatory focus to ensure improvements are delivered in practice rather than through commitments alone.

Which? responds to the FCA’s response

This response showed that Which? does not consider the issues raised by the super-complaint to be resolved and expects further action to follow the FCA’s expanded work.

What the FCA’s response signals for firms

The FCA’s response signals a shift in how complaint and claims outcomes are being used in supervision. Rather than viewing complaints purely as dispute resolution events, regulators are increasingly treating them as indicators of how firms operate in practice and whether they are meeting expectations.

Where issues recur across products or firms, the focus moves beyond individual decisions to questions of:

• Governance and oversight

• How judgement is applied at scale

• Consistency of decision making

• The quality of management information (MI) available to senior leaders

In this context, firms are expected to understand their own data and outcomes before concerns escalate externally.

From regulatory response to operational expectation

The super-complaint process illustrates how customer experiences can translate into market-wide scrutiny when patterns persist over time.

For firms, the challenge is not reacting once issues reach the Ombudsman or attract regulatory attention. It is ensuring they have the visibility and control needed to identify emerging risks earlier and address them systematically.

That is increasingly where regulatory expectations are heading.

FAQ: FCA response to the Which? super complaint

What was the Which? super complaint about home and travel insurance?

Which? filed a super complaint alleging persistent issues in home and travel insurance claims handling, including delays, poor communication, unclear cover at point of sale, weak oversight of third parties, and cash settlements that may leave customers out of pocket. It argued these were systemic concerns rather than isolated service failures.

How did the FCA respond to the Which? super complaint?

The FCA confirmed it would expand its supervisory and enforcement activity across the home and travel insurance markets. Rather than closing the matter, it committed to increased scrutiny of claims handling practices, customer communications, outsourcing oversight, and firms’ ability to evidence fair outcomes under Consumer Duty.

Why is the FCA treating complaints data as a supervisory signal?

The FCA increasingly views complaint and claims outcomes as indicators of operational control, governance quality, and whether firms are delivering fair value in practice. Persistent complaint patterns may signal systemic weaknesses rather than isolated disputes, prompting wider supervisory review.

What does the Which? super complaint mean for insurers?

The super complaint signals that claims handling, communication quality, and oversight of third parties will remain under regulatory focus. Insurers are expected to demonstrate consistent decision making, robust management information, and early identification of recurring issues before they escalate to the FOS or attract enforcement attention.

How does the super complaint relate to Consumer Duty?

The Consumer Duty requires firms to deliver good outcomes across the customer journey, including claims handling. The FCA’s response reinforces that complaint patterns, communication failures, and repeat harm may be assessed as evidence of whether firms are meeting those outcome-based expectations in practice.