Financial Services Regulation Committee publishes report on home and travel insurance regulation

The Financial Services Regulation Committee published its report, Home and travel insurance regulation: more for the FCA to do, on 23 October 2026¹. The committee, chaired by Baroness Noakes DBE, launched an inquiry in May into the regulation of consumer home and travel insurance, with a focus on the Financial Conduct Authority's approach¹.

The report finds that home and travel insurance products have low claims acceptance rates relative to other retail insurance products, and that they are "inherently complex" with consumer understanding remaining low despite the FCA's Consumer Duty requiring firms to support it¹. It says price comparison websites have driven intense price-led competition, which has helped consumers find affordable products but led to a focus on price rather than overall product value¹. It also identifies a lack of readily available and comparable data on elements of product value other than price, especially claims outcomes, which it says inhibits consumers from comparing products and prevents comparison sites from comparing product value effectively¹.

The report links products bought on price rather than levels of cover, and a lack of understanding about what is and is not covered, to persistently high rates of declined claims¹. It notes that claims experiences can vary significantly, and that the FCA has acknowledged the need for further work on claims-handling practices carrying a higher risk of consumer harm, including outsourced claims handling and cash settlements¹. It also raises concerns about the growing use of AI by consumers to research home and travel insurance, which is not regulated by the FCA¹. On the Consumer Duty, the report states that it "has not yet translated into improvements for consumers", and that the FCA has a number of actions in train but the timetables for completion are not clear¹.

The committee recommends that the industry and the FCA accelerate work to improve consumer understanding, particularly of what policies do and do not cover; that the FCA outline how it will address poor claims-handling practices; and that it consider making consumers aware of the potential problems of relying on AI when buying insurance¹. It says that, absent industry agreement on comparable metrics, the FCA should step in to ensure comparable outcomes data is widely available, and should develop how it measures the impact of the Consumer Duty¹. It also calls on the FCA to produce a roadmap with clear timescales for delivery¹.

Why it matters for households

The report concerns home and travel insurance bought by consumers, and its central finding is about what happens when a claim is made: it says declined claims are persistently high and that poor understanding of cover often becomes clear only at the claims stage¹. For travellers, that bears on what a policy covers for cancellation, medical conditions and other risks, subjects covered in our guides to how travel insurance works and travel cancellation cover. The report does not announce any rule change or new requirement taking effect on a set date; its recommendations are addressed to the FCA and the industry¹. No response from the FCA to the report has been reported.

What happens next

The report asks the FCA to produce a roadmap with clear timescales for its work, and to set out how it will address poor claims-handling practices¹. No date has been given for when the FCA will respond or publish such a roadmap; that has not been reported¹.