FOS Health Insurance Complaints

The Financial Ombudsman Service (FOS) published its public complaints figures this month. But are they valuable and what do they tell us about complaints made about medical health insurance?

If people are unhappy with their health insurance company they have to follow the company's official complaints procedure and if they are still not satisfied they can appeal to the independent FOS who will make a final decision in each case.

The statistics collected for insurance include different types of insurance including private medical insurance as well as critical illness insurance and income protection therefore there is not an easy comparison. However out of all the insurance complaints they received 70% were upheld. This is a large percentage and means that 7 out of every 10 complainants had not received fair treatment from their insurance company.

Individual companies were named although again it is hard to compare as different types of products were being scrutinised.

Complaints Upheld
Bupa - 25%
Aviva Health UK - 36%
AXA PPP Healthcare - 44%

Maggie Craig, director of consumer strategy at the Association of British Insurers (ABI), said:

'It’s absolutely right that consumers should know about the performance of firms who look after their insurance and investment needs, and complaints handling is an important part of that. But any such data must be presented in a way that helps consumers make informed choices.

'Unfortunately, the way that the FOS has chosen to present the data doesn’t achieve this aim, and may in fact mislead consumers about the performance of individual firms. For example, consumers can’t compare performance by sector or by product.'

Even though comparisons between figures may be misleading it must provide an extra incentive for the private medical insurance industry and individual health cover providers to look at their complaints statistics and procedures and see where they are going wrong.

More transparency is what some quarters are looking for. Critical illness insurance providers, for example, have to declare their claim rejection figures every year. Transparency enables solutions to come quicker even though it may be painful for a company to expose its results to the general public.

The complaints figures for this year were almost the same as last year which is a good sign. Since 2005/6 complaints have come down from 2,291 to 1,874. The ABI's work on improving non-disclosure is one of the reasons for this reduction.

According to FOS one area where they still receive complaints is in health insurance cases where consumers received reveiwed premiums which they feel are unfairly steep. Their website states:

'We continue to receive complaints from consumers who have entered into so-called "reviewable" insurance policies, where the insurer has the right to review the premium at intervals of five or ten years. These disputes generally involve reviews that have been carried out after many years – and have resulted in a significant increase in the premium.'

Unfortunately FOS does not publish the results from companies who have had less that 30 complaints. F0r a small company this may represent a large number of complaints and it would be good for the public to have this kind of information available to them.