Overview

• An interim premium finance study found some lenders earn far more from instalment insurance than service costs justify, prompting deeper Consumer Duty scrutiny.
• Concerning claims mishandling practices included weak oversight of outsourced providers and insufficient management information, which have caused delays and high complaint volumes.
• Referral fees paid to credit hire and claims management companies were tied to slower claims processing and rising sector costs.
• Motor insurance claim expenses jumped by £2.3 billion (34%) from 2019 to 2023, largely due to higher vehicle repair and accident damage costs.
• The FCA is taking direct action against underperforming firms and feeding fresh evidence into the government’s motor taskforce to help restrain future premium growth.