The Association of British Insurers (ABI) and the British Insurance Brokers' Association (BIBA) appeared before the House of Lords Financial Services Regulation Committee on Wednesday, 24 June 2026, in the fourth and fifth oral evidence sessions of its inquiry into the regulation of the UK's consumer insurance market.
Chris Bose, director of general insurance and international at the ABI, told the committee insurers paid close to £12 billion in motor claims in 2024, alongside £6.1 billion in property claims and £500 million in travel claims. Graeme Trudgill, chief executive of BIBA, said the association's approximately 1,800 member firms place around £150 billion of premium annually, with brokers handling roughly a third of the personal lines market.
Trudgill set the tone early. "The insurance market is fundamentally working well for most customers," he said, "but we know there are areas to work on constructively together to achieve higher claims acceptance rates."
A significant disparity in claims acceptance rates dominated both sessions. Bose said virtually 99% of motor claims are accepted, while the equivalent figure for property claims is approximately 70%.
Peers questioned whether existing satisfaction data accurately reflects fair outcomes, particularly where consumers later pursue complaints through the Financial Ombudsman Service (FOS). Bose rejected suggestions that insurers build claim declinatures into their business models and said pricing is based on risk rather than targeting a level of declined claims.
Both witnesses said the Consumer Duty has improved consumer outcomes, while acknowledging that more work remains. Bose noted that, unlike motor vehicles, homes have no mandatory maintenance requirement equivalent to an MOT.
Bose also acknowledged a broad spread of acceptance rates across firms and confirmed the ABI is working with the Financial Conduct Authority (FCA) on improving consistency in claims data and reporting. For context on how the regulator has approached this issue previously, see Insurance Business UK's coverage of FCA insurance supervisory priorities.
Both witnesses said the Consumer Duty has driven meaningful change, while acknowledging that more work remains.
Bose described the regime as a significant step up in consumer protection, requiring firms to actively pursue good outcomes rather than simply demonstrate compliance. He pointed to clearer policy documentation and greater use of prompts during the purchasing journey to help consumers understand cover and exclusions. "The consumer duty, where it works best, creates a strong feedback loop which can inform how insurers operate," he said.
On outsourcing, Bose was clear that delegation of activity does not reduce regulatory responsibility. "You as an insurer can outsource some of the activities, but you cannot outsource your regulatory obligations," he told the committee. He acknowledged the FCA has found examples of insurers lacking sufficiently robust oversight of third-party claims handlers and said the ABI is developing best-practice guidance on outsourced claims handling to support firms.
Trudgill welcomed the Consumer Duty as extending best-interest obligations across the wider distribution chain, noting that brokers had long operated in the client's best interest but that the regime had now introduced equivalent obligations for insurers. However, he criticised the administrative burden created by fair value assessment requirements under product governance rules. A broker dealing with 50 insurers across 20 product lines, he said, could face up to 1,000 separate fair value assessments, a process that has cost some firms millions of pounds.
Trudgill also pointed to the FCA's 2024 intervention in the gap insurance market, arguing regulators failed to distinguish between distribution channels. He said broker-distributed gap insurance showed strong claims ratios and little evidence of consumer harm, despite restrictions being applied across the wider market.
The dominance of price comparison websites emerged as a structural concern across both sessions.
Bose said between 35% and 50% of home and travel insurance consumers buy through comparison platforms. He stopped short of calling for standardisation of policy terms, arguing that mandatory minimum product standards could reduce consumer choice and affordability. Instead, he said consumers need better information to understand differences between products and make appropriate purchasing decisions.
Trudgill was pointed on the structural problem with comparison platforms. "They're called price comparison sites, not suitable insurance comparison sites," he told peers, adding that the industry's focus on price – and increasingly on speed – comes at the cost of suitability. "Currently we believe there's too much focus on price as opposed to the suitability of the insurance for that specific customer's needs," he said. He added that BIBA estimates up to 14% of consumer insurance queries now begin with an AI-powered search, describing the trend as both an opportunity and a risk.
Trudgill also called on the FCA to identify which distribution channels generate the highest levels of claims rejection, saying the regulator is currently conducting analysis that could help target future reforms more effectively.
The committee also explored how the industry reaches consumers with lower levels of financial literacy.
Bose said around one in six UK adults has a reading age of 11 or 12, creating challenges for financial services broadly. He said insurers are increasingly using simplified language, layered documentation and video content to improve consumer understanding.
The ABI is also planning a wider consumer education campaign focused on helping consumers better understand what insurance covers, what it excludes and how to make informed purchasing decisions.
Trudgill highlighted BIBA's specialist signposting services, including support for consumers seeking flood insurance, travel cover for pre-existing medical conditions and insurance for older motorists. He said BIBA handles more than 400,000 public enquiries annually and that its signposting schemes have helped an estimated 1.7 million people since launch.
"The broker's opportunity to have a client with a claim is the most important point of all," he said, "because that's where they prove why they're there to support them."
