FCA tells insurers to improve claims communication

The Financial Conduct Authority (FCA) has warned insurers they must communicate more clearly with customers about what their policies cover.

In its first Regulatory Priorities report for the UK insurance sector, the regulator said poor claims experiences remain a persistent issue for consumers and industry bodies, prompting it to place greater scrutiny on how insurers explain coverage, limitations and exclusions before customers buy a policy.

As part of its priorities for the year ahead, the FCA said firms should ensure communications are clear enough for consumers to understand what their insurance does – and does not - cover, and that companies actively test whether those messages are working.

The move follows ongoing concerns raised by consumer groups including Which?, which previously filed a super complaint about claims handling practices and the difficulties some policyholders face when seeking payouts.

The FCA said insurers should not only provide clear information but also monitor whether products and services deliver on the promises made in their communications.

The regulator also said it will monitor developments in areas such as pet insurance and private medical insurance, where price increases and gaps in consumer understanding have been flagged as potential concerns.

Looking ahead, the FCA expects to publish a consultation in 2026 on how to incorporate requirements from the Digital Markets, Competition and Consumers Act 2024 into its handbook.