What does Which?’s recent super-complaint mean for people with mental health problems?

“Super-complaint.” Dedicated followers of consumer news or regulatory updates  might have heard this word very recently.

That’s because the consumer organisation Which? have lodged one with the Financial Conduct Authority (FCA), the body that regulates financial services. Which? have argued that the insurance industry is failing customers and the FCA needs to do something about it. Insurance is an area we have explored before and is something our Research Community, a group of 5,000 people with lived experience of mental health problems, regularly tell us about. So we wanted to consider what this super-complaint is and what impact it might have on people with mental health problems.

Rather than a new comic book character, a super-complaint is a key part of our regulatory system. A super-complaint is a complaint made by an organisation on behalf of a group of consumers about an issue in a market. Whereas we as individuals can complain about how a company might have treated us, certain consumer organisations can make a complaint about how an industry treats customers.

There are only a few organisations who can do this. We recently achieved this status in certain markets and we’re waiting to hear if that will also include financial services. Past super-complaints have looked at the ‘loyalty penalty’, when existing customers can end up paying more than new ones, and how supermarkets price their products. 

In this super-complaint, Which? have focused on home and travel insurance. Their research, conducted over the last year or so, has found troubling issues in the way insurance companies process claims. Which? argue that the FCA have not done enough to tackle this issue despite publishing reports that have found similar problems.

As a result, they are now calling on the FCA to tackle the problem head on and take enforcement action against any firms breaking the rules. Which? also wants the FCA to launch a market study, which means looking closely at how this market works. Under the rules around super-complaints, the FCA has 90 days to respond, but is under no requirement to take any specific action.

Our most recent report on insurance, Written off?, focused on travel insurance and in particular what impact telling an insurer about a mental health problem had on the price and level of cover offered. We found that for people with severe bipolar it can lead to the price jumping by up to 27 times more compared to someone without mental health problems. However, most travel insurers we tested with didn’t offer someone with severe bipolar cover at all. 

Which? haven’t looked at the pricing of travel and home insurance, but rather what information is provided to customers when they purchase the product and what it’s like to make a claim. In our report, we found that people with mental health problems can face challenges in both of these areas. Similarly to Which? we found that insurers can sometimes be slow to process claims and fail to provide regular updates which can worsen someone’s mental health.

In particular, we highlighted how poor processes and complicated information can combine with common symptoms of mental health problems to make it even harder for people. We also called on the FCA to take action in the insurance market, with a focus on how insurers make their decisions.

We welcome the super-complaint from Which? and support their calls, given the issues we (and many others) have found in the insurance market. Depending on the FCA’s response, this could be a golden opportunity to also tackle the issues we have identified, especially how insurers use mental health problems in pricing decisions. If the FCA does launch a market study, it must also explore what information and models insurers are using to make their decisions.

We will wait and see what the FCA does in response to this super-complaint. Nevertheless, our interest in insurance and making the market work better for people with mental health problems will continue no matter what they decide.