Insurance disputes lead to rise in Financial Services Ombudsman complaints in 2016-2017
Record number of claims handled by Financial Services Ombudsman
Disputes handled by the Financial Ombudsman Service (FOS) increased by 16% from last year, according to the annual Financial Ombudsman Service (FOS) 2016-17 report.
The 2016-17 financial year had a record number of disputes, totalling 34,095.
The general insurance sector accounts for 38% of the overall increase in disputes. A total of 13,200 insurance related disputes were received, up a whopping 2,612 disputes from the year before.
But why are consumers getting progressively more annoyed with their insurers?
"Higher claim numbers, organisational changes and the impact of Cyclone Debbie, all of which may have affected insurers' internal dispute resolution", chief ombudsman Shane Tregillis said.
Cyclone Debbie has undoubtedly had a huge impact on a number of disputes recorded. With a huge 68,848 insurance claims lodged, it's expected that not every consumer will be happy with the outcome.
And the stats tell a similar story. More than two-thirds (69%) of domestic insurance disputes were triggered by a consumer complaining about the insurer's decision.
The core issues identified include claim amount (20%), denial of claim (18%), and denial of claim – exclusion/condition (16%), suggesting that consumers aren't reading PDS' to understand what's excluded in their policy.
Most disputes (89%) were lodged directly against insurance companies. Only 8% involved an underwriting agency.
What were the disputes about?
|Category||Number of disputes||Percentage|
|Investment and advice||1,292||5%|