The Financial Services and Pensions Ombudsman (FSPO) has published its Overview of Complaints for 2021.

Complaints relating to insurance products and services represented 27% of all complaints received in 2021 down from 32% in 2020. Motor insurance and health, accident and dental insurance received the highest complaints each accounting for 23% of total insurance complaints respectively. This was followed by life insurance complaints which accounted for 12% and travel insurance complaints measured at 11% of all insurance complaints.

The top 5 insurance conducts complained of were as follows:

• Claim handling – 26% (down from 27% in 2020)
• Rejection of Claim – 25% (up from 10% in 2020)
• Customer Service – 15% (up from 4% in 2020)
• Maladministration – 8% (the same figure as 2019)
• Refusal to give product/service – 7%

Complaints relating to claims amounted to 51% of total complaints an increase from the 37% observed in 2020.

Pension Scheme Complaints represented 4% of all complaints received in 2021 the same percentage observed in 2020. These complaints related to public and private occupational pension schemes, trust Retirement Annuity Contracts (trust RACs) and Personal Retirement Savings Accounts (PRSAs).

The highest complaint rate in this category related to occupational pensions schemes which accounted for 77% of complaints.

The top 5 pension conducts complained of were as follows:

• Maladministration – 30% (down from 33% in 2019)
• Calculation of pension benefit – 26% (up from 22% in 2020)
• Failure to provide information/correct information – 12% (down from 14% in 2020)
• Customer Service – 11% (up from 3% in 2019)
• Refusal of product/service – 9% (up from 7% in 2019)

The report noted that by the end of 2020, 600 complaints had been received by the FSPO that included an element involving COVID-19. By the end of 2021 an additional 275 complaints were received in this category and the numbers of complaints continued to trend downwards over the course of the year. Of the 275 complaints received, 75 related to business interruption and 36 related to payment breaks. The report noted that the largest number of complaints in this category were in the insurance sector.

The FSPO acknowledged in the report that the circumstances surrounding COVID-19 related business interruption claims were exceptionally difficult for many businesses however also noted that the success of the claim is dependent on the cover provided under the policy. The report highlighted the importance of the wording within each policy in these circumstances. In some cases, full indemnity was provided, whereas in others, there was none.

In one case the wording in the policy focussed on ‘‘any occurrence of a notifiable disease within a radius of 25 (twenty five) miles of the premises’. The FSPO interpreted this wording to conclude that hat any occurrence of COVID-19 within the 25-mile radius was enough to trigger cover once it could be shown to have caused interruption to the business. However, in a different case where the policy wording indicated ‘Loss of income and/or increased cost of working as insured by this section incurred by you as a result of interruption or interference with the business caused by: an outbreak of any notifiable disease occurring at the premises’ – the complainant failed to provide evidence of an outbreak of COVID-19 withing the premises itself so the FSPO accepted the insurer had not acted wrongfully in deciding to decline the claim.

More generally, in 2021 the FSPO received 4,658 new complaints and closed 5,010 complaints. The outcomes for complainants during 2021 were as follows:

• 1,820 complaints were closed through Dispute Resolution Service
• 599 clarifications were accepted
• 11 complaints were settled between the parties outside Dispute Resolution Service
• 1,153 complainants achieved a mediation settlement through our Dispute Resolution Service, with the value of those settlements, totalling more than €4.6m
• The combined value of compensation directed in legally binding decisions following the formal investigation process was €941,328
• An additional €944,167 was paid to complainants by providers to resolve complaints during the FSPO’s formal investigation process
• A further €667,993 in redress from providers was noted by the FSPO as available for acceptance by complainants, leading to legally binding decisions where those complaints were not upheld because the offer in question was reasonable and adequate to redress the conduct giving rise to the complaint, and no formal direction by the Ombudsman was required

The report notes that 23% of complaints made to the FSPO were complaints about poor customer service from financial services providers and further noted that a more responsive service from these providers could avoid the level of complaints from arising. The report also referred to the growing complexity for consumers in determining who they are dealing with or who they are entering into a contract with when purchasing financial and pension products and particularly the difficulties that arise from the outsourcing of complaints handling by providers. The report notes that the FSPO have raised issues surrounding aspects of services provisions to the Central Bank of Ireland as part of its ongoing review of the Consumer Protection Code.

Insurance Ireland continues to work with FSPO and policymakers on conduct and consumer issues, supported by our Culture and Conduct Risk Committee (CCRC) as well as various other working groups. If you would like more detail on the work in this area, please contact Jacqueline Thornton and Michael Horan.