There is always volatility in the insurance market but, clearly, the pandemic prompted an unprecedented upsurge in claims in certain areas. In February 2021, the Association of British Insurers estimated that UK insurers expected to pay £2.5 billion for claims made during the first year of the pandemic alone.
Two years on from the start of the pandemic, the dynamic of the insurance industry is much altered. According to the FCA, by March 2022, pay-outs have already exceeded £1 billion for policies affected by the FCA test case. The hard market has been exacerbated by the impacts of the pandemic – particularly for products such as cyber insurance. The FCA has seen a need to being in greater regulation and new rules around Consumer Duty are expected in July 2022.
Despite these significant challenges, and the FCA’s intervention, our primary research found that the vast majority of businesses and consumers feel positive about their insurance providers and most of the insurance policies they buy.
This report is based on the views of 2,000 consumers of personal insurance and 403 business insurance purchasers, in the UK.