Insurers need to do more to improve how they handle claims and make it clearer to customers what their policies cover, the UK’s finance regulator has said.

The Financial Conduct Authority (FCA) was responding to a “super-complaint” by consumer group Which? about the home and travel insurance sectors.

The regulator acknowledged some problems needed addressing, and said it would expand its scrutiny of how claims are processed and how clear policies are to customers.

Consumer groups said the FCA must follow this up with strong action and see it as a first step to fundamental reform.

A super-complaint is rare, and only used by consumer groups when they believe a large number of people are being significantly harmed by practices across a particular sector.

Consumer group Which? had argued that the home and travel insurance sectors were “broken”. It said that in some cases making a claim to an insurance company could be a worse experience than the distress of the original incident.

The super-complaint was based on three areas of concern. The first was the way that claims are handled, with many being outsourced by insurers to specialists.

The second was the sales practices of insurers, which the consumer group argued were inappropriate and led to widespread confusion over what was covered in a policy.

Finally, it accused the FCA, as the regulator, of failing to provide an appropriate degree of protection for consumers.

Millions of people across the UK take out insurance policies they hope they will never need to draw on.

Some 22 million home insurance policies were in force last year, with consumers paying more than £7bn in premiums. During the year, consumers made almost 900,000 claims, with insurers paying out a total of £3.2bn.

There were more than 6.8 million travel insurance policies, with premiums of £1.2bn paid last year. Some 600,000 claims led to payouts of more £400m.

But Which? highlighted that acceptance of claims and subsequent payouts were much less likely among home and travel insurance than motor and pet policies.

The FCA found that in 2024, 99% of motor claims were accepted, compared with 80% of standalone single trip travel claims and 74% of home content-only claims.

The regulator said that this, in part, reflected the lower levels of understanding among consumers of what their insurance policy covered.

Graeme Reynolds, director of competition at the FCA, said the regulator would “expand our existing workplan” to ensure improvements to the claims process and consumer understanding of their cover.

“We will continue to hold firms and their senior leaders to account for making improvements, to help build trust and make sure people get fair value insurance,” he said.

The Association of British Insurers (ABI), which represents companies, said the improvements demanded by the FCA were “a top priority” for the sector.

The FCA said it had already addressed various areas of concern in the sector, but consumer groups – including Which? – said more action was needed.

Rocio Concha, Which? director of policy and advocacy, said the FCA must now bring about meaningful change for consumers.

“These issues have been allowed to fester for years, so the FCA must now seize the opportunity to take strong action to stamp out widespread bad practice and issues with how the markets are working,” she said.

James Daley, managing director of consumer group Fairer Finance, said: “The [FCA] response is unlikely to be sufficient to get to grips with the many and growing problems in this sector.

“The insurance market is caught in a race to the bottom on price – leading to the hollowing out of products, as well as poorer claims experiences.”

BP has appointed a new chief executive, making Meg O’Neill the first woman to run a major global oil firm.

The London-based energy giant said its current boss Murray Auchincloss would step down less than two years after he replaced Bernard Looney, who was found to have committed “serious misconduct” in failing to disclose relationships with colleagues.

BP executive vice president Carol Howle will serve as interim chief executive until Ms O’Neill, who has led Australian energy firm Woodside Energy since 2021, takes up her new role on 1 April.

Ms O’Neill said she looks forward to helping BP “do our part to meet the world’s energy needs”.

Mr Auchincloss, who took over from Mr Looney in September 2024, said he had told BP’s chairman in September that he was open to stepping down “were an appropriate leader identified”.

“I am confident that BP is now well positioned for significant growth and I look forward to watching the company’s future progress,” he said after Ms O’Neill’s appointment was announced. He will serve in an advisory role until December 2026.

Ms O’Neill said she would prioritise re-establishing the oil giant’s market leadership, as well as advancing safety and driving innovation and sustainability.

BP praised Ms O’Neill’s time as chief executive of Woodside Energy, pointing to the firm’s takeover of BHP Petroleum International in 2022.

It said she had grown the business into the largest energy company listed on the Australian Securities Exchange.

Before joining Woodside, Ms O’Neill spent 23 years in technical, operational and leadership positions at Texas-based energy firm ExxonMobil.

Mr Looney was dismissed without notice in 2023, and forfeited up to £32.4m ($43.3m) in salary and benefits, after admitting that he was not “fully transparent” about his past personal relationships.

BP’s board said they had been “knowingly misled” by Mr Looney.

At the time, Mr Looney said in a statement that he was “disappointed with the way this situation has been handled”.

Ms O’Neill’s appointment comes as BP is cutting its renewable energy investments and instead focusing on increasing oil and gas production.

In February, the energy giant said it would shift its strategy following pressure from some investors who were frustrated that its profits and share price had lagged behind rivals.

Rivals Shell and Norwegian company Equinor have also scaled back plans to invest in green energy and US President Donald Trump’s call to “drill baby drill” has encouraged firms to invest in fossil fuels.

The sudden departure of Mr Auchincloss comes only three months after the appointment of a new chair of the BP board, Albert Manifold.

Energy consultant and former Shell executive Robin Mills told the BBC’s Today programme that the “surprise” appointment of Ms O’Neill was about refocusing on its core oil and gas businesses.

“The new chairman, Albert Manifold, has really decided to put his stamp on things,” he said.

“I think the announcement that’s been put here made it very clear that he felt Murray [Auchincloss] had done a decent job, but not enough and more was needed and some new leadership, some new blood.”