UK FCA Expands Home and Travel Insurance Scrutiny Following Which? Super-Complaint

The UK's Financial Conduct Authority (FCA) is intensifying its oversight of the home and travel insurance markets following a rare super-complaint submitted by consumer champion Which? in September 2025. A super-complaint is a statutory mechanism that allows a designated consumer body to formally trigger regulatory scrutiny where it believes a market is causing widespread consumer harm. In its response, the FCA committed to a year of stepped-up supervision while pushing back on some of Which?'s broader recommendations.

Which? had raised concerns that consumers were routinely treated poorly when making claims, that claims were rejected too often, and that policyholders fell victim to unfair terms and conditions. The home and travel markets were targeted because they showed some of the lowest claims acceptance rates across the insurance sector. The FCA's own earlier analysis had found concerning evidence, including that only 32% of storm damage claims made to a sample of firms in 2024 resulted in a payment, alongside weak oversight of outsourced claims services and insufficient management information.

The FCA rejected Which?'s call for a joint review with the government of consumer protection frameworks, stating its view — shared by the government — that the current legislative framework and available rules are sufficient to protect consumers and allow appropriate enforcement action. The regulator also disputed Which?'s legal analysis suggesting unfair application of contract terms. However, the FCA acknowledged that more work was needed and committed to concrete steps: reviewing firms' customer service and claims delivery, scrutinizing how insurers oversee third-party claims handlers, and analyzing how different sales processes (across insurers, brokers, and price comparison websites) affect consumer outcomes.

The regulatory pressure already has teeth. The FCA disclosed it had opened two enforcement investigations, imposed a growth restriction on one firm until identified issues were fixed, launched three independent reviews into systems and controls, and secured remedial commitments from senior managers. Home insurance is the UK's third most common retail insurance product, with around 22 million policies in force and consumers paying more than £7 billion in premiums in 2024. The expanded scrutiny signals that the FCA's outcomes-focused Consumer Duty regime will be applied with increasing rigour to claims handling.