Today, we’re thrilled to sit down with Simon Glairy, a renowned expert in insurance and Insurtech, with deep expertise in risk management and AI-driven risk assessment. With years of experience navigating the complexities of the insurance industry, Simon offers a unique perspective on the challenges and innovations shaping this space. In our conversation, we’ll explore critical issues surrounding claims handling in home and travel insurance, the impact of regulatory oversight, variations in industry practices, and the potential for broader reform in how insurers interact with customers.
What sparked the recent push for regulatory action against the home and travel insurance sectors?
The push for action stems from growing frustration over low claims acceptance rates and poor customer service in these sectors. Consumer advocates have highlighted that some insurers are rejecting a significant portion of claims—sometimes paying out on less than half of submissions. Beyond that, there’s a real concern about how customers are treated, with complaints about inadequate communication and confusion over policy coverage. It’s a combination of hard data showing disparities in payouts and longstanding grievances about the customer experience that’s driving calls for change.
How do claims acceptance rates in home insurance reveal disparities among providers?
The data is pretty telling. In 2023, some companies had acceptance rates as low as 40–45% for buildings insurance claims, compared to a market average of around 63%. Even for combined buildings and contents policies, where the average acceptance rate is closer to 72%, certain providers were only hitting 50–55%. These gaps aren’t just numbers—they point to real differences in how claims are handled and, ultimately, how policyholders are supported when they need it most.
Can you walk us through the key trends in claims acceptance for travel insurance?
Travel insurance shows a similar pattern of inconsistency. Last year, the average acceptance rate for single-trip policies was about 76%, with annual policies for worldwide and European coverage slightly higher at 77% and 78%. But some providers lagged significantly behind, with acceptance rates as low as 65% in specific categories, and others hovering around 70% for single-trip claims. These variations raise questions about why some customers are far less likely to get a payout depending on who they’re insured with.
What role do policy wordings and company practices play in these inconsistent claims outcomes?
It’s a complex issue. Even when policy language is nearly identical across providers, the outcomes for claims can differ widely. This suggests that it’s not just about what’s written in the fine print but how companies interpret and apply those terms. A provider’s internal culture or claims-handling approach can make a huge difference—some might prioritize strict adherence to exclusions, while others take a more customer-centric stance. That variability can leave policyholders feeling like they’re rolling the dice when they file a claim.
What are some of the persistent challenges in how insurers treat their customers?
One major issue is communication—or the lack of it. Customers often feel left in the dark during the claims process, sometimes stuck in long disputes without clear updates. There’s also a lot of confusion about what’s actually covered under a policy. Many people buy insurance thinking they’re protected for certain events, only to find out later that exclusions or unclear terms mean they’re on their own. These problems aren’t new; they’ve been festering for over a decade due to what some see as insufficient regulatory pressure.
What kind of response are consumer advocates hoping to see from regulators in addressing these issues?
There’s a strong push for regulators to step in with enforcement actions, particularly targeting firms with consistently low claims acceptance rates. Beyond that, advocates are calling for a fundamental “reset” of these markets. This means not just slapping fines on bad actors but rethinking how insurers are held accountable for customer treatment—whether through clearer reporting requirements, better policy transparency, or stricter oversight of claims processes. The goal is systemic change, not just quick fixes.
How have insurance providers responded to the criticism surrounding their claims data?
Many insurers have defended their numbers by pointing to nuances in how data is reported. For instance, some argue that their figures include all inquiries, even those where no coverage existed, which can skew perceptions of their acceptance rates. Others highlight that their products are specialized, making valid claims harder to establish compared to standard policies. There’s also a stance that rejected claims often stem from events outside policy terms, with companies asserting they pay out on all eligible submissions. It’s a mix of explanation and justification, though not everyone buys it.
What broader implications might this wave of scrutiny have for the insurance industry as a whole?
This isn’t just about home and travel insurance—it could ripple out to other personal lines like motor or pet insurance, where similar complaints about exclusions and disputes are common. Regulators might start demanding more transparency in how claims data is reported and how policies are explained to customers. For insurers, there’s a risk of tighter rules around product governance, clearer language in contracts, and even greater accountability at the board level for claims outcomes. We could be looking at a significant shift in how these products are designed, sold, and managed.
What is your forecast for the future of customer treatment in the insurance industry?
I think we’re at a turning point. If regulators respond with meaningful reforms—and insurers take the hint—we could see a future where transparency and fairness become non-negotiable. Technology, like AI-driven tools for clearer policy explanations or faster claims processing, could help bridge the trust gap. But if the industry resists change, we might see even more consumer backlash and stricter oversight down the line. My hope is that this moment sparks a genuine commitment to putting customers first, but it’s going to take sustained effort from all sides to get there.
