The FCA has identified improvements needed in how life insurers handle claims and measure customer satisfaction, despite good support for bereaved clients.

A recent FCA review of life insurers found evidence of good practices, such as providing additional support to claimants during emotionally challenging times. The FCA acknowledged that firms often face difficulties in processing claims quickly due to the need for thorough evidence gathering.

However, many insurers still fall short of meeting FCA standards, especially regarding the measurement, monitoring, and delivery of positive service outcomes for customers.

On average, insurers took between 53 and 122 days to process a term life insurance claim. Group life cover claims averaged 36 days, over-50s plans took about 20 days, and whole-of-life claims averaged 53 days. However, the FCA noted inconsistent tracking of these timelines across firms.

The FCA plans to collaborate with the industry to enhance customer experiences and will monitor firms’ progress closely. Further action may be taken if improvements are not observed.

Matt Brewis, Director of Insurance at the FCA, commented:
“Losing a loved one is an incredibly stressful experience, and we expect insurers to provide compassionate and efficient support to their customers during these tough times.

“All life insurers should act on our findings to avoid unnecessary delays in claims processing.”

Following the introduction of the Consumer Duty in July 2023, firms must ensure that customers remain central to their operations and consistently deliver positive outcomes.