Tense situation: Premiums for insurance rise while service declines

In a comprehensive analysis, the consumer organization Which? has uncovered alarming findings about the current state of the insurance industry. Despite rising premiums, consumers are increasingly facing difficulties when making insurance claims. Over 8,500 complaints to the Financial Ombudsman and a survey of more than 3,000 policyholders who have filed claims in the past three years highlight this issue. Nearly half of the respondents reported encountering problems, regardless of whether their claim was accepted. Typical difficulties include repeatedly uploading documents, inadequate communication about the status of claims, and insurers' sheer ignorance of customers' existing data. Even in particularly critical cases, such as house fires or car accidents, policyholders are twice as likely to experience problems. The study emphasizes that especially vulnerable customer groups are not adequately protected. Several factors are hidden behind rising premiums. Significant cost inflations in home and automobile insurance following Covid-19 and devastating weather events exert increased pressure. Insurers, having faced poor underwriting results in recent years, passed these rising costs on to consumers. For the insured, this is a disheartening situation, particularly as insurers deliver poor performance in the event of a claim, which is often perceived as the first and decisive interaction with the company. Human interest reports in the media underscore this discrepancy: policyholders who have paid high premiums feel doubly burdened when claims are processed slowly. Insurers cite the complexity and volume of claims processed annually as the reason for the problems and report efforts to improve service. However, the Financial Conduct Authority (FCA) demands stronger commitment to fulfilling consumer rights and increased scrutiny of claims management processes. While prices are not expected to fall until 2025, consumers are advised to compare thoroughly, remove unnecessary policy elements, and persistently negotiate for better terms with their insurer. Additionally, innovative services, such as on-demand insurance or telematics devices to monitor driving behavior, can offer interesting savings potential. In conclusion, it is advisable to make preventive measures visible to demonstrate risk reductions and potentially achieve lower premiums.