FOS insurance complaint trends: Uphold rates, claims handling and risk

Complaint data is often treated as a measure of a service or product failure. In practice, it’s something more useful than that. Over time, it highlights where insurance operations come under sustained strain, where decision-making becomes harder to deliver consistently at scale, and where complaint data is not being properly analysed and acted upon.

Several years of data from the Financial Ombudsman Service (FOS) remove the noise of short-term spikes and allows patterns to emerge. Not just what customers complain about, but where processes repeatedly struggle.

By the time a case reaches the Ombudsman, the complaint has another added layer: the outcome of an earlier decision.

What FOS insurance complaint data shows about claims handling pressure points

The presented data from the Ombudsman paints a remarkably consistent picture in general insurance.

Insurance complaint volumes by product over five years

• Car and motorcycle insurance generated more than 61,700 complaints, accounting for 32%

• Buildings insurance followed with approximately 30,600 complaints, or 16%

• Travel insurance accounted for around 22,100 complaints, or 11%

• Home emergency insurance accounted for around 11,600 complaints, or 6%

• Home contents insurance saw approximately 8,300 complaints, or 4%

Car and motorcycle, buildings, and travel insurance, represent 59% of all general insurance complaints considered over this period.

Why volume alone does not explain complaint risk

Importantly, these volumes are broadly proportionate to the number of policies in force and the scale of each market. They are not unexpected outliers. However, volume alone does not tell the full story.

When complaint volumes are considered alongside uphold rates, a more revealing picture emerges. In the FOS’s Q3 2025 data (July to September 2025), 33% of resolved cases were upheld in favour of the consumer. That is a meaningful level of “decision reversal” and it reinforces that complaint risk is not just about how many cases arise, but how consistently outcomes align with Ombudsman expectations over time.

Travel insurance as a recurring case study

Recent figures reinforce this long-term view rather than contradict it. In the same quarter (Q3 2025), travel insurance complaints referred to the Ombudsman rose sharply, reaching one of the highest levels since the immediate post-COVID period. Travel now sits as the third most complained about general insurance product, with 35% of cases upheld.

This mirrors earlier concerns raised across the market, including those highlighted in the Which? super complaint on home and travel insurance.

In addition, the Financial Conduct Authority’s response to the super complaint reflects how regulators are now treating these issues as part of wider, long-term market oversight.

The consistency of these signals suggests the issue is not fromisolated events or short-term pressure; instead it highlights structural weaknesses that continue to expose firms to regulatory and reputational risk.

Why insurance complaints escalate when reassurance and communication break down

Customers rarely escalate concerns at the first sign of friction. They wait for progress. They follow up. They seek reassurance that matters are being addressed fairly and consistently.

Complaints tend to surface when that reassurance does not materialise. When communication breaks down, ownership feels unclear, and decisions are not explained clearly.

By the time a complaint is raised with the FOS, it often reflects breakdowns and eroded trust that occurred much earlier in the insurance claims journey.

Why FOS insurance complaint data is lagged but still valuable for trend analysis

FOS data is structurally lagged because of escalation rules.

A complaint must exist, remain unresolved, and then be referred before it ever shows up in FOS volumes. Changes such as fees, professional representative rules, or pauses in referral behaviour can distort the timing of what you see.

That said, it’s still one of the best datasets we have for analysing industry complaint trends, provided you’re clear about what question is being asked.

What FOS data cannot tell you about frontline pressure points

Here is the nuance leaders often miss.

FOS data is weak at answering “what is happening right now on the frontline”. It’ll always trail operational reality by months, sometimes longer. If escalation behaviour changes, volumes can fall even while underlying complaint quality issues persist.

What FOS data is particularly good at revealing

FOS data reveals a few key patterns over time:

• Which products and sectors are generating disputes that firms fail to resolve well the first time around;

• Whether root causes are being fixed or are simply cycling back through the system;

• How upheld rates shift over time, which is one of the clearest signals of complaint quality rather than complaint volume;

• Whether regulatory or commercial changes are suppressing escalation without improving outcomes.

Upheld rates reveal where first-line decisions and FOS expectations diverge

This is why the upheld rate is often more revealing than raw volumes. A fall in referrals with a stubbornly high upheld rate tells a very specific story: fewer complaints are reaching the Ombudsman, but when they do, the Ombudsman is still finding against firms at scale. That points to unresolved systemic issues, not improvement.

For complaint leaders and COOs, the real value of FOS data is its role as a trend and outcome lens, not a real-time dashboard. It should be read alongside internal MI, resolution quality, repeat complaint themes, and early warning indicators. Used in this way, it’s a powerful signal of where industry-wide pain is building, even if it hasn’t fully surfaced.

FOS data is not late. It’s slow by design. The mistake is treating it as an operational metric instead of a strategic one.

This is exactly where leadership alignment matters. Frontline teams see the pressure first. FOS data shows whether the system is learning fast enough.

How internal complaint MI helps insurers act before issues escalate externally

Internal complaint data, however, allows firms to act earlier in a way that external data cannot. While FOS data shows how decisions are judged after escalation, internal complaint data shows whether firms are actually in control of outcomes as they are being delivered.

When captured and analysed consistently, it highlights emerging themes, pressure points, and decision patterns before they harden into systemic risk or escalate externally. Used well, complaint data becomes a form of management information (MI).

Firms that take this approach aren’t waiting for outcomes to be judged after the fact. They’re using complaint data to improve claims decisions, strengthen communication, and intervene earlier in the customer journey to reduce escalation pressure.

As Insurance DataLab co-founder, Matt Scott, has observed, complaints data is increasingly viewed by regulators as a key measure of customer outcomes in practice, not just process compliance. Over time, it shows whether firms are producing fair outcomes consistently, rather than relying on frameworks that appear robust but fail under pressure.

Consumer Duty, claims handling, and rising expectations in insurance

Under Consumer Duty, the claims experience has become one of the clearest tests of insurer performance in practice and one of the most visible expressions of leadership intent. This reframes claims and complaints as a leadership accountability, not an operational afterthought.

The continued prominence of claims-related complaints indicates that this remains an area of sustained pressure across the industry. Delays, disputed exclusions, partial settlements, and unclear communication are not edge cases. They are recurring features in Ombudsman decisions.

This doesn’t reflect a lack of effort from complaint teams. Rather, it highlights the difficulty of delivering consistently good outcomes when claims journeys are complex, and information is fragmented across systems and teams.

This is where having a single, structured view of the insurance claims and complaint journey becomes imperative, giving complaint teams the context and evidence they need to consistently meet rising customer expectations and Consumer Duty requirements.

Where insurance complaint teams feel the greatest operational pressure

Chasing information across systems, clarifying ownership, and responding within regulatory timeframes increases operational strain, making fairness and consistency harder to achieve.

Over time, this shifts complaint handling away from resolution and towards risk absorption.

What insurance complaint data reveals about control, visibility, and governance

When the same upheld themes repeat over multiple years, the question must shift from individual decisions to oversight, governance, and control. At this point, the issue is no longer whether teams are trying hard enough, but whether the organisation has the visibility and structure needed to deliver consistent outcomes at scale.

Recurring delays, documentation gaps, and inconsistent decision explanations are difficult to address without a structured way to capture the full customer journey. Fragmented information limits visibility and makes it harder for complaint teams to demonstrate fairness and consistency.

When information is fragmented, teams spend more time piecing together what happened than resolving the issue itself. They have to chase claim notes, decision records, customer communications, and policy evidence across multiple systems, often under deadline pressure. Effective complaint handling increasingly depends on systems that preserve context, evidence, and decision rationale from the outset rather than attempting to reconstruct it later.

Complaint management software, when designed around regulated workflows, forms part of that regulatory toolkit. Not as a reporting layer, but as an operational control that supports consistent outcomes and defensible decision making.

What good complaint handling looks like in insurance

Escalation reduces when claims decisions are consistent, evidence is easy to trace, and the decision rationale is clear. Better outcomes follow when ownership is visible end to end and customers understand how and why decisions are reached.

Successful complaint handling is supported by a clear framework, continuity, and access to complete information. Where those elements are in place, complaint teams can resolve issues faster, outcomes stay consistent, and trust is easier to maintain.

What this means for insurance leaders

For senior leaders, FOS insurance complaint data isn’t a scorecard to defend or dismiss. It’s a long-range signal of whether the organisation is learning fast enough from customer friction.

Sustained upheld themes over multiple years point to gaps in control, visibility, and decision consistency rather than isolated performance issues. Where those gaps persist, risk accumulates quietly. By the time outcomes are judged externally, opportunities to intervene earlier have already passed.

The firms meeting Consumer Duty expectations most consistently are not those waiting for Ombudsman outcomes to confirm problems after the fact. They’re the ones using internal complaint data as live management information, testing whether decisions are being applied consistently in practice and giving teams the structure and context they need to resolve issues confidently the first time.

In this sense, complaint data is no longer just evidence of failure. Used well, it becomes evidence of governance in action, and a measure of how effectively leadership intent is translating into real customer outcomes.

That is the difference between absorbing complaint risk and actively controlling it.

Note: Quarterly references in this blog draw on Financial Ombudsman Service complaints data for July to September 2025, while the five-year product volumes reflect a longer term aggregation of FOS general insurance complaint volumes.

FAQs

Why do insurance complaints often relate to claims handling?

Insurance complaints frequently relate to claims handling because this is the time a policyholder needs help and gets to test the value of their insurance policy. Claims involve time, judgement, and communication. Where delays or uncertainty arise, customers are more likely to escalate concerns, particularly if expectations are not managed clearly.

When can a customer escalate a complaint to the Ombudsman?

A complaint can be referred to the Financial Ombudsman Service (FOS) if the firm has issued a final response and the customer remains dissatisfied, or if eight weeks have passed without a final response being issued.

What does an upheld Ombudsman complaint indicate?

An upheld complaint means the Ombudsman considers the customer has received unfair treatment, or an unfair decision, by the firm responsible for handling the complaint. Consistently high uphold rates can indicate misalignment between first-line decisions and Ombudsman expectations.

Why do the same complaint themes repeat over time?

Repeated themes often point to structural or system limitations rather than individual performance. Firms are treating the symptom of the problem rather than the root cause. How information flows, decisions are documented, and communication is managed play a significant role. The FCA expects firms to proactively use complaint data to implement improvements and prevent long-term underlying issues.