Business
Which? launches super-complaint against ‘broken’ insurance industry
Kevin PeacheyCost of living correspondent
Getty ImagesMaking a claim to an insurance company can be worse than the distress of the original incident, according to Which?, as it launches a rare type of action against the sector.
The group’s super-complaint – which is an action by a consumer body on customers’ behalf – says the home and travel insurance sectors are “broken”.
Which? highlighted cases including an insurer initially refusing to pay out for a cancelled holiday, because the trip had technically started before the flight was turned back after two hours.
The insurers’ trade body said providers worked hard to help customers, handle claims efficiently, and had paid out many millions of pounds.
Rocio Concha, director of policy at Which?, said that serious failings in the travel and home insurance markets had been “tolerated for too long” by the insurance industry and the regulator, the Financial Conduct Authority (FCA).
“We have heard heartbreaking stories from people who have found the experience of dealing with an insurance company worse than the distressing life events that led to their claim,” she said.
She added that a super-complaint was “a major intervention”. Such a move is rare, and only used by consumer advocates when they believe a large number of consumers are being significantly harmed by practises across a particular sector.
Refused insurance claims
Millions of people across the UK take out insurance policies they hope they will never need to draw on.
Estimates suggest around 30 million people have buildings and contents insurance, with a similar number buying either annual or single-trip travel cover during last year.
Which? said that 99% of car insurance claims were upheld, but acceptance rates fell to 63% of buildings insurance claims and 80% of travel insurance claims.
It pointed to the case of Yvette Greenley, whose flight from Luton to Egypt was sent back owing to technical difficulties.
Yvette GreenleyMrs Greenley said the problem with the flight and a lack of alternatives meant her holiday to celebrate her 60th birthday with her sister, Beverley, was over. She cancelled her leave and went back to work.
While the airline refunded the cost of the ticket, the insurer initially refused the £140 claim for accommodation and travel to and from the airport because the holiday had begun.
“I was flummoxed, then fuming about it. They seemed to dismiss the fact that the plane turned around,” she said.
The insurer later apologised, settled the claim and paid compensation.
In recent years, BBC News has reported cases including:
Analysis of cases, in addition to surveys and research by Which? have led to the super-complaint that, by law, requires a response within 90 days.
‘A number of failures’
The complaint is based on three areas of concern. The first is the way that claims are handled, with many being outsourced by insurers to specialists.
The second is the sales practices of insurers, which the consumer group argues are inappropriate and lead to widespread confusion over what is covered in a policy.
Finally, it accuses the FCA, as the regulator, of failing to provide an appropriate degree of protection for consumers.
It has received support from James Daley, managing director of independent consumer group Fairer Finance.
“The FCA has only recently finished a number of studies looking at this market – and while it acknowledged a number of failures, it seems to have no appetite to tackle these,” he said.
A spokesman for the FCA said it would respond to the super-complaint in due course, but had been “focused on raising standards”.
“We uncovered issues when we recently reviewed insurers’ home and travel claims handling. We’ll be holding them and their senior managers accountable for the changes needed,” he said.
They included issues over outsourcing and storm definitions.
The Association of British Insurers, which represents providers, said that its members worked hard to ensure customers knew the details of policies and handled claims as quickly and efficiently as possible.
“In the first half of this year alone, insurers have paid out over £1.7bn for more than 300,000 home insurance claims. Last year, travel insurers also paid out £472m across more than 500,000 claims,” a spokeswoman said.
“We’re working closely with the regulator to ensure good outcomes for customers and will engage with Which? to understand the details of its concerns.”
Morrisons has said it will shut 52 of its in-store cafes along with some of its convenience stores, florists, meat and fish counters and pharmacies.
Eighteen market kitchens, 17 convenience stores, 13 florists, 35 meat counters, 35 fish counters and four pharmacies will also be affected.
The supermarket said the closures are part of a shake-up which will result in 365 people facing redundancy.
Full Morrisons store closure list
Cafes
Bradford Thornbury – West Yorkshire
Paisley Falside Rd – Renfrewshire, Scotland
London Queensbury – Greater London
Portsmouth – Hampshire
Great Park – Tyne and Wear
Banchory North Deeside Rd – Aberdeenshire, Scotland
Failsworth Poplar Street – Greater Manchester
Blackburn Railway Road – Lancashire
Leeds Swinnow Rd – West Yorkshire
London Wood Green – Greater London
Kirkham Poulton St – Lancashire
Lutterworth Bitteswell Rd – Leicestershire
Stirchley – West Midlands
Leeds Horsforth – West Yorkshire
London Erith – Greater London
Crowborough – East Sussex
Bellshill John St – North Lanarkshire, Scotland
Dumbarton Glasgow Rd – West Dunbartonshire, Scotland
East Kilbride Lindsayfield – South Lanarkshire, Scotland
East Kilbride Stewartfield – South Lanarkshire, Scotland
Glasgow Newlands – Glasgow, Scotland
Largs Irvine Rd – North Ayrshire, Scotland
Troon Academy St – South Ayrshire, Scotland
Wishaw Kirk Rd – North Lanarkshire, Scotland
Newcastle upon Tyne Cowgate – Tyne and Wear
Northampton Kettering Road – Northamptonshire
Bromsgrove Buntsford Ind Pk – Worcestershire
Solihull Warwick Rd – West Midlands
Brecon Free St – Powys, Wales
Caernarfon North Rd – Gwynedd, Wales
Hadleigh – Suffolk
Harrow, Hatch End – Greater London
High Wycombe Temple End – Buckinghamshire
Leighton Buzzard Lake St – Bedfordshire
London Stratford – Greater London
Sidcup Westwood Lane – Greater London
Welwyn Garden City Black Fan Rd – Hertfordshire
Warminster Weymouth St – Wiltshire
Oxted Station Yard – Surrey
Reigate Bell St – Surrey
Borehamwood – Hertfordshire
Weybridge, Monument Hill – Surrey
Bathgate – West Lothian, Scotland
Erskine Bridgewater SC – Renfrewshire, Scotland
Gorleston Blackwell Road – Norfolk
Connah’s Quay – Flintshire, Wales
Mansfield Woodhouse – Nottinghamshire
Elland – West Yorkshire
Gloucester – Metz Way – Gloucestershire
Watford – Ascot Road – Hertfordshire
Littlehampton – Wick – West Sussex
Helensburgh – Argyll and Bute, Scotland
Morrisons Daily convenience stores
Gorleston Lowestoft Road – Norfolk
Peebles 3-5 Old Town – Scottish Borders, Scotland
Shenfield 214 Hutton Road – Essex
Poole Waterloo Estate – Dorset
Tonbridge Higham Lane Est – Kent
Romsey The Cornmarket – Hampshire
Stewarton Lainshaw Street – East Ayrshire, Scotland
Selsdon Featherbed Lane – Greater London
Haxby Village – North Yorkshire
Great Barr Queslett Rd – West Midlands
Whickham Oakfield Road – Tyne and Wear
Worle – Somerset
Goring-By-Sea Strand Parade – West Sussex
Woking Westfield Road – Surrey
Wokingham 40 Peach Street – Berkshire
Exeter 51 Sidwell Street – Devon
Bath Moorland Road – Somerset
Paul SeddonPolitical reporter
Rachel Reeves has suggested she favours removing limits on benefits linked to family size at this month’s Budget.
The chancellor told the BBC it was not right that children in bigger families were “penalised” through “no fault of their own”.
The comments are a sign she could remove the two-child limit on working-age benefits introduced under the Conservatives in 2017.
Some Labour MPs have been calling for a full reversal of the policy, amid reports she was considering paring back payments after two children instead.
In September, the Guardian reported that Treasury officials were considering a tapered approach, under which parents would receive most benefits for their first child and less for subsequent children.
Other options under consideration included limiting additional benefits to three or four children, the newspaper reported.
But speaking to Matt Chorley on BBC Radio 5 Live, Reeves suggested she did not want to see benefits limited according to family size.
“I don’t think that it’s right that a child is penalised because they are in a bigger family, through no fault of their own,” she added.
“And so we will take action on child poverty. The last Labour government proudly reduced child poverty, and we will reduce child poverty as well.”
She added there were “plenty of reasons why” parents who decided to have three or four children could see their financial circumstances change.
Manifesto pledges
Elsewhere in her interview, she all but confirmed the government plans to break Labour’s manifesto pledge at last year’s general election not to raise income tax rates, VAT or National Insurance.
“It would of course be possible to stick with the manifesto commitments. But that would require things like deep cuts in capital spending,” she added.
“What I can promise now is I will always do what I think is right for our country. Not the politically easy choice, but the things that I think are necessary to put our country on the right path,” she added.
Labour’s 2024 election manifesto pledged not to raise the basic, higher, or additional rates of income tax, or National Insurance – prompting a row last autumn when Reeves announced a hike in the contributions paid by employers.
It also promised not to raise Value Added Tax (VAT), a sales tax, although the manifesto did not specify whether this applied to the rates, or which products are subject to the charge.
The chancellor has not ruled out continuing to freeze income tax thresholds beyond the 2028 date fixed by the last government, allowing more people to be dragged into higher bands as their wages rise over time.
Pressed on whether she could have avoided tax hikes through lower public spending, she said she was “not going to apologise” for increased funding for the NHS, adding that reducing waiting lists was one of her three Budget priorities.
She also claimed that some of the spending she unveiled at June’s spending review had been pencilled in, but not properly funded, by the Tories.
‘Same choices’
The two-child cap prevents households on universal or child tax credit from receiving payments for a third or subsequent child born after April 2017.
This is different to child benefit, which is paid to families where the highest-earning parent earns less than £80,000.
Separately, there is also an overall cap on the amount of benefits working-age families can claim, which has been in place since 2013.
The Institute for Fiscal Studies think tank estimates fully reversing the two-child benefit cap could take 630,000 children out of absolute poverty, defined as households with an income below 60% median average, at a cost of £3.6bn a year.
Pressure to ditch the limit increased during the recent Labour deputy leadership contest, where successful candidate Lucy Powell and runner-up Bridget Phillipson both indicated they favoured more action on child poverty.
Reform UK is pledging to scrap the limit for working British couples if it wins power, although the Conservatives say the cap should remain in place, forcing a symbolic vote on the issue in the House of Commons in September.
Speaking after the vote, Tory leader said her party believes “those on welfare should have to make the same choices as those who aren’t,” and Labour and Reform were expecting working people to pay for “unlimited handouts”.
The FTSE 100 hit an all-time best on Monday, passing 9,800 for the first time, as hopes grow for an end to the US government shutdown.
The FTSE 100 Index closed up 104.58 points, 1.1%, at 9,787.15, a record closing peak.
It had earlier set a new intra-day best level of 9,800.35.
The FTSE 250 ended 194.88 points higher, 0.9%, at 21,968.27, and the AIM All-Share climbed 8.07 points, 1.1%, at 757.54.
The risk-on mood came as the US Senate cleared the way for a formal debate on a motion to resume funding to federal agencies.
The Republican-led chamber approved a procedural vote after a handful of Senate Democrats crossed over to permit debate on a measure that could end the longest shutdown in US history.
“The prospect that the longest US government shutdown in history may end in the next few days has bolstered risk appetites,” said Marc Chandler, at Bannockburn Capital Markets.
In European equities on Monday, the CAC 40 in Paris closed up 1.5%, while the DAX 40 in Frankfurt soared 1.7%.
In New York, the Dow Jones Industrial Average was little changed at around the time of the London close.
The S&P 500 index was 0.7% higher, while the Nasdaq Composite advanced 1.3%.
Nvidia rose 3.9% ahead of results next week while Advanced Micro Devices climbed 5.7% ahead of Tuesday’s analyst day at which new financial targets are expected to be unveiled.
Morgan Stanley said the developments mean the government shutdown could end this week.
The bank thinks the first major data print post-shutdown is likely to be the September employment report, with other data on inflation and spending probably taking a further one to two weeks.
“We think the data in-hand by the time of the December Fed meeting will be enough for them to cut,” Morgan Stanley added.
Kathleen Brooks, at XTB, said the end of the US government shutdown “comes at the right time”, just before Thanksgiving.
“This should allow American families to fly all over the country for the holidays and it should mean that supply chains are fully functioning for the biggest shopping weekend of the year,” she observed.
Sterling was quoted at 1.3160 dollars at the time of the London equities close on Monday, lower compared with 1.3166 dollars on Friday.
The euro stood at 1.1554 dollars, down against 1.1582 dollars. Against the yen, the dollar was trading higher at 153.97 yen, compared with 153.07 yen.
The yield on the US 10-year Treasury was at 4.11%, widened from 4.07% on Friday. The yield on the US 30-year Treasury was quoted at 4.70%, stretched from 4.68%.
Back in London, the countdown to the Budget at the end of November continues.
Speaking to the BBC, Chancellor Rachel Reeves said the Budget will be focused on the cost of living, getting government debt down and cutting NHS waiting lists.
Speaking to Radio 5 Live, Ms Reeves would not be drawn on specific measures but said tax and spending decisions will be influenced by a productivity review by the Office for Budget Responsibility and ongoing conflicts and disruptions to trade.
It will be a “difficult” Budget, she said, but one focused on “fairness” and growing the economy.
Diageo rose 5.2% after it appointed former Tesco boss Dave Lewis as its new chief executive.
The London-based owner of Guinness stout and Johnnie Walker whisky said Mr Lewis, who led Tesco from 2014 to 2020, will join Diageo at the start of 2026.
Prior to his time at Tesco, Mr Lewis spent nearly three decades at Marmite owner Unilever, where he earned the moniker “drastic Dave” in recognition of his reputation as a cost cutter and turnaround specialist.
Jefferies analyst Edward Mundy said the appointment “ends the uncertainty over leadership transition and brings a heavyweight leader with extensive CEO experience on both brand building and transformation”.
“Not only does he have extensive CEO experience, strong brand-building capabilities and a keen cost focus, he played an important role in changing the culture and restoring the Tesco brand,” Mr Mundy commented.
Gains in the gold price lifted blue-chips Fresnillo and Endeavour Mining 5.4% and 4.5% respectively, while on the FTSE 250 Hochschild Mining jumped 8.0%.
Gold traded higher at 4,091.42 dollars an ounce on Monday against 4,012.24 dollars on Friday.
Entain rose 3.0% as Investec upgraded to “buy” from “hold”, while British Airways owner IAG rallied 3.7% after Friday’s heavy falls after third-quarter news.
On the FTSE 250, RHI Magnesita jumped 17% as it said performance has improved in the second half of 2025 despite subdued demand conditions.
The Vienna-based refractory products maker said adjusted earnings before interest, tax and amortisation were 136 million euros in the four months to October, significantly ahead of the run-rate in the first half of 2025 and in line with guidance.
In the first six months of 2025, RHI Magnesita reported Ebita of 141 million euros.
JTC fell 4.3% after agreeing a £2.7 billion all-cash takeover by Permira Advisers worth 1,340 pence per share.
RBC Capital Markets said conversations with shareholders suggested that price expectations were higher at 1,450p, “so we think there will be a degree of disappointment”.
“We are not convinced that this is yet a done deal however,” the broker added.
Brent oil was quoted slightly lower at 63.45 dollars a barrel at the time of the London equities close on Monday, from 63.51 dollars late on Friday.
The biggest risers on the FTSE 100 were Fresnillo, up 118 pence at 2,310p, Diageo, up 90p at 1,816.5p, Endeavour Mining, up 134p at 3,142p, Polar Capital Technology Trust, up 20p at 472p and SSE, up 74.5p at 1,943p.
The biggest fallers on the FTSE 100 were London Stock Exchange, down 198p at 9,072p, Rightmove, down 10.2p at 563.4p, Hikma Pharmaceuticals, down 27p at 1,555p, BT, down 2.25p at 177.1p and Compass, down 26p at 2,479p.
Tuesday’s global economic calendar has UK jobs and average earnings data plus the British Retail Consortium’s retail sales monitor.
Tuesday’s UK corporate calendar has half-year results from telecommunications group Vodafone and sales, marketing and support services provider DCC.
Contributed by Alliance News
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