The August 2025 issue of Which Magazine is not an emotional rendering of one person's poor experience of UK home insurance customers but the result of a ranking survey of its membership. Whatever your thoughts on Which and its membership this is extremely negative. Perception has a powerful influence and once a reputation is damaged it is difficult to regain the initiative. The survey covers P&C carriers rather than commercial insurers.
Many UK insurers say they settle 97% to 98% of household content claims as a quality benchmark.
Which magazine quotes the FCA stating in 2023 that 25% of buildings insurance claims were declined and over a quarter of combined buildings and contents policy claims declined. That is a far different picture than that painted by some really big brand insurers.
Property issues like subsidence, escape of water, and flooding are complex with subrogation processes, the involvement of main and subcontractors, specialist engineers and inspectors who are usually disconnected from any insurer's core and claims systems. It is a big black hole leading to delays, extra costs and frustration for customers and claim team members.
The majority of carriers rely on policy-centic core systems rather than customer-centric. They have no easy option when their legacy and even more recently upgraded core sytems are based around policies and not customers.This is compounded by the 80% and more of unstructured data locked behind data siloes. Different line of business running on different technology stacks that are disconnected. Common with large Tier One carriers and especially global ones which operate 15, 25 often far more tech stacks across the various countries; the outcome of intense M&A strategies over the years.
Even a carrrier with good online FNOL and claims processing, backed by human handlers if customers so wish, may run 40% of transaction processing on legacy mainframes. Those AS400s humming away reliably in the data centre. Carriers may surrround these inflexible and remote mainframes with a ‘digital band-aid layer’ but at best this is a stopgap that will increasingly lead to competitive decline. Maybe not in 2025 and 2026 but over the next five years customer behaviour will change, new competitors will enter the market with customer knowledge leveraged to deliver credible, customised products.It might be death by a thousand cuts but eventually blood loss weakens any carrier; maybe terminally.
The key complaints WHICH Magazine members describe are:
- Confusion over complex terms
- Exclusions buried in the fine print
- Lack of pricing transparency
- Difficulties during the claims process
- Excessive monthly premiums for those who cannot afford annual payments
- Inconsistent customer service
The perception of customers is that carriers prioritise profit over people “undermining the insurance industries purpose of providing financial security and peace of mind” which most carriers claim as their raison d'etre".
Are carrriers blind and living in complacement about this gaping gap between reported perception and their own own published customer sat scores?
Many carriers do not help because they compete on price rather than value to grow market share and premiums. The wide use of price comparison websites by UK customers brutally exposes that strategy.
Which recomends its members use trusted PCWs and direct insurers and focus not just on price but also on service quality by checking independent reviews such as itself of course. They urge readers to read and compare policy details carefully to understand what is included and excluded but unless carriers make that easier it is hard to achieve. How many home & contents customers actually check the details? Most rush in and renew via PCW websites.
This is the first year since 2010 that Which has NOT awarded recommended provider endorsement to its members.It looks like previous ‘Best Buys’ have slipped down since the last comparison surveys which maybe a year old.
Which Magazine also states that the whole GI sector, including car, pet and travel, has failed to properly support UK consumers. So whilst this article is focussed on Home, the other LOBs do not escape this critique.
What should insurers do to reverse this?
They are not helped by the infexible, hard-coded and expensive to upgrade systems many rely on. I and many others have written about this fervently over the years and how carriers can escape from legacy technology.
Rory Yates, Andre Symes, Lisa Wardell, Matteo Carbeone being a small sample. David McMillan CEO of esure was brave enough to ‘re-imagine' insurance from a customer’s prioritiies rather than his own carrier's. The results need to be analysed whilst esure provides some evidence of this-- see Further Reading below.
If an insurer can connect all its value chain and suppliers in a workable ecosystem it has a chance to turn the Which rMagazine eport around. Too often large parts of the supply chain are outside existing ecosystems eg brokers, MGAs, contractors, repair and restoration shops . Waiting for email and phone confirmation is a fool's errand that wastes everyones time but usually the only recourse. Yet the entire value chain could be connected so that all stakeholders will be updated automatically avoiding people hanging on the phone for answers for non-forthcoming emails or text messages.
See further reading below which lists some of the technology partners that can help carriers, brokers, MGAs and reinsurers escape in practical stages manageable by the whole organisation.
Maybe start with a the launch of a new line of business not on the current core platform to test the market potential and where it makes business sense operationalise and grow. I know of four UK carriers that are taking this approach which is significant.
In parallel you will have tested the value of the new MACH-architected platform and know whether or not to trust it with other lines of business. Innovation one step at a time. Evetnually you will know whether or not it is viable to transition to the new coretech . It took esure two years with EIS ( see further reading). That leadtime is practical and would help ensure you establish a competitive advantage before the opportunity vanishes. Time waits for no man or woman.
Vitally that approach will help avoid the complaints that Which Magazine members report with home and contents insurers i.e. :
- Confusion over complex terms of cover
- Exclusions buried in the fine print
- Lack of pricing transparency leading to mistrust
- Difficulties during the claims process
- Claim settlement times extended
- Inconsistent customer service
- Excessive monthly premiums for those who cannot afford annual payments
- The equivalent of driver emotional anger- 'customer claim rage - my term and not in the Which survey.
The insurer will also avoid shared pain :
- costs adding up for the customer and the insurer
- combined ratios suffering i.e. declining
- Automated payment of cash settlements being delayed when insurer payment systems are disconnected from claims.
It gets worse and worse and meanwhile customers fret and change allegiences to new credible alternative competitors slowly and then faster and faster. Customer churn in action. It is a basic business tenet that it costs less to look after and keep an existing customer than to win and keep a new one.
Have UK carriers forgotten that?
This is not just about claims of course.Underwriting operating without realtime claims data is accepting risk on past trends and not evolving ones. Pricing becomes divorced from reality. I explore this in a survey from Capgemini on Trailblazing Underwriters in Further Reading below.
Some UK carriers operate a determined underwriting strategy to grow margins rather than market share. Sabre Insurance CEO Geoff Capes describes a bell shaped strategy targeting profitable customers. See further reading.
Primarily, Sabre motor insurance chief executive Geoff Carter puts this down to the firm’s scale and underwriting strategy. He explains:
”We plant our flag very, very clearly that we’re going after margin first and that’s what we focus on.
Aiming for the COR that we do is always going to limit the ability for scale because there’s only so many policies you can underwrite at [around a] 20% margin. We won’t ever be the biggest, but we do want to be the most profitable.”
Sabre’s scale – H1 2024 gross written premiums of £125.7m across just under 300,000 policies – does provide it with flexibility, Carter continues, meaning that the insurer does not need to chase volume and “get stuck in no man’s land”. Source: Insurance Times Aug 2024
However, Carter adds that "there still remains significant headroom for expansion, with Sabre targeting “nice, sustainable” growth of between 10% and 15% per year."
ERS, another UK motor insurer also reports excellent finacial and COR results. Neither will be immune to problems with claim processing though should either suffer the complaints listed by Which Magazine members.
Please note- Neither Sabre nor ERS feature in the Which ‘Best UK insurance companies and policies compared’ survey so I wont' tar them with the same brush as some very well known UK brands.
In a rapidly changing world, changing customer behaviour, ever increasing competition, and the growth of new products such as embedded insurance, new entrants to the market even Sabre and ERS might change their minds and consider newer coretech and augment their teams of claims handlers, data scientists and data engineers with AI.
Auutmated payment of cash settlements are delayed when insurer payment systems are disconncted from claims. It gets worse and worse and meanwhile customers fret and change allegiences and new credible alternative competitors slowly and then faster grow market share.
The solution lies in the hands of carriers if they are brave enough to face the future with the vision, leadership and ability to operationalise true innovation rather than just cost-cutting.
Further Reading
Underwriting trailblazers outgun mainstream insurers.
esure chooses RightIndem as its digital claims technology platform
Sabre Insurance's CEO Geoff Carter: How scale, strategy and a ‘barbell approach’ to underwriting is keeping Sabre so profitable
If carriers hope that they can leapfrog this process and competitors with GenAI and AgenticAI and think again:
Will GenAI and Agentic AI transform insurance claims management for insurer's competitive advantage?
Insurance Times on FCA ’Transparency in claims handling is paramount, fostering trust and demonstrating a genuine commitment to customer well-being,’ says head The UK GI market has welcomed the FCA’s decision
Which? is naming and shaming the companies responsible for the biggest consumer letdowns of the year in its third annual Shoddy Awards, as it challenges firms to do better for their customers. To be nominated for a Shoddy Award, companies had to fall short on criteria such as: failing an industry standard, offering poor value for money, making false claims or regularly underperforming in the consumer champion’s research.
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