Insurance and investment companies could reduce their complaints significantly by improving their administration and customer service, according to a complaints survey.
However the FSA's approach to publishing complaints data has also been criticised for ‘deflecting attention away from organisations with genuine service issues.'
The Navigant Complaints Survey revealed more than half (58%) of complaints to insurance companies are due to administration or customer service problems.
Findings were even more damning for investment management firms who receive three quarters (76%) of their complaints because of administration or customer service problems.
The results show that insurance and investment management companies received 183 reportable complaints per 100,000 customers on average over the first six months of this financial year.
Analysis by the consulting firm suggests a natural level of complaints that companies receive, which it said challenged the current media scrutiny that falls upon those providers with the largest volume of complaints.'
And the report highlighted that the source of many complaints can be readily addressed.
"The analysis demonstrates that the majority of complaints relate to administration or customer service issues, which are within a company's ability to fix," it continued.
"Three quarters (76%) of investment management complaints and 58% of insurance complaints relate to administration or customer service and if more is done to improve this function, complaints volumes could be reduced."
Jim Evans, head of regulatory strategy, risk and compliance at Navigant, condemned the FSA for not taking company size into account when publishing its complaints data.
"The FSA published individual financial services providers' complaints volumes in September - but the regulator's analysis didn't take account of the size of the company," he said.
"Larger providers will attract more complaints as they have more customers, that much is clear. As such, simply focusing on those companies with the highest volume of reportable complaints can deflect attention away from organisations with genuine service issues.
"Complaints volumes are an outcome and not the driver. If you understand the root cause of complaints and focus on the customer and outcomes, you can fix the cause and reduce the volume of complaints," he added.
It also found that insurance businesses pay-out on average more than double the amount that investment firms do in goodwill (£200 vs £90) and redress (£850 vs £350), while redress payments tend to be four times the amount paid out in goodwill across both industries.
The report asked whether the difference between insurance and investment firm pay-outs can be attributed to product complexity alone, or if there was lesson to be learned for insurers?
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