Complaints handling in insurance sector in trouble?

News just out from the Central Bank of Ireland today identified that insurance firms in Ireland have more work to do on their complaints handling.

The results of an inspection of complaints handling processes by the Central Bank showed that none of the insurance firms inspected were fully compliant with the Consumer Protection Code.  This Code sets out how firms must handle consumer complaints. Over 600 individual complaints across twelve insurance firms were inspected. In some cases the results are so poor that apparently the Central Bank is considering enforcement action.

Some of the basic requirements of good complaints handling were lacking.  There were examples in all firms that consumers were not provided with details of an individual point of contact until the complaint was resolved or could not be processed any further.

Even when a contact point was provided consumers had to restate the details of their complaints time and again to different staff in the insurance firms.  Naturally this increased consumer dissatisfaction and no doubt increased the costs of complaints handling by the insurance firms themselves.

Some firms didn’t inform the customer of their right to take the matter to the Financial Services Ombudsman (FSO), or didn’t give them the contact details of the FSO.

When it came to acknowledging complaints there were occasions in all firms where the requirement to acknowledge complaints in writing was not adhered to.

Speed was also an issue because when acknowledgements were issued there were occasions when this was not done within the required five working days.

It rather looks as if the common sense contained within the Consumer Protection Code is far from common practice.

The Code itself contains an appropriate process for complaints handling which if followed will help handle complaints effectively.  It may be that poor training on complaints handling is one of the root causes behind these disappointing results.