The latest figures from the Financial Ombudsman reveal both the names of the insurers who receive the fewest complaints and those that receive the most. The data makes important reading for all in the sector; since getting things wrong becomes common knowledge and can result in serious damage to a firm’s reputation and performance.
It was back in 2011 that the Ombudsman said it would publish the names of financial firms, and this became possible under the Financial Services Bill. At the time, the Ombudsman said: “In many cases, the identity of the financial business is central to the issue in question.”
Naming and shaming
And so, the naming and shaming began, with complaints data published every six months. Apart from company names, these figures are also useful because they show where the areas where most complaints are made.
The most recent figures are for April to September 2017 and they show that home emergency cover had the highest number of complaints at 888 and some 45% were upheld.
There is clearly an education piece to be done around this product, as it appears that some customers are not clear about what they can claim for and what exclusions exist.
Certainly, the largest provider HomeServe has made strides in recent years to improve its sales strategies and transparency not least by publishing online customer reviews through Trustpilot and Reevoo. However, there is no doubt more to be done across the market overall in terms of improving clarity.
Complaints handling a priority
The data also reveals that there is a strong business case for putting a high priority on complaints handling. Take the example of NFU Mutual, which has the lowest number of upheld complaints of any insurer. The insurer targets those living out of town, including farms, higher value country home, motor and equine. It continues to produce strong trading results, but unlike so many others, has not sought to be the cheapest and also pushes the local service message – it uses a network of local agents to advise on cover and assist with claims.
Meanwhile LV, another mutual also scored highly and the insurer said its approach is to try and resolve the problem before the customer feels compelled to complain to the Ombudsman.
Notably, the customer has to wait eight weeks for the insurer to sort out the problem before they can escalate matters – this is a reasonable amount of time to enter discussions and the fact that complaints are published, should be a further incentive for the insurer to seek an acceptable resolution.
Avoiding the blame game
One side effect of the PPI scandal has been to make customers far more aware of their right to complain and as a result, it is crucial that firms have a robust claims handling protocol in place, with input and oversight from risk managers.
This should also be subject to regular reviews to ensure it is effective and indeed, that complaints both in house and which are taken to the Ombudsman are as low as possible.
Among areas to consider are:
- Ensure that a collective approach is taken – having one individual with overall responsibility is likely to be result in poorer outcomes.
- Complaints should be seen as providing useful feedback, with the reasons and solutions disseminated across the business if relevant.
- Is it easy to make a complaint? Can the customer reach an empowered individual to speak to? If not, there could be regulatory intervention.
- Are the right systems in place to record complaints and to help with business intelligence for review work?
Complaints are never welcome, but taking a pro-active approach and ensuring that any mistakes are taken on board, is the surest way to keep this increasingly public issue under control.