Admiral Group Plc (LSE:ADM) saw its shares decline on Tuesday following a statement from the Financial Conduct Authority (FCA) highlighting concerns about claims handling across the insurance sector.
According to the FCA’s latest review, soaring motor insurance premiums are largely the result of external cost pressures—such as rising vehicle prices, parts, and labor—rather than increased insurer profits. The regulator emphasized that while higher theft claims are also contributing to the surge, the industry’s claims management practices require significant improvement.
Although the FCA acknowledged these broader cost drivers, it also criticized some insurers for poor claims performance, particularly in the home and travel insurance markets. The review pointed to a range of shortcomings, including inadequate oversight of outsourced claims handlers, excessive complaint volumes, slow claim resolutions, and notably low approval rates for storm-related damage.
These findings are part of a wider examination into how insurers are managing customer claims amid shifting market dynamics. While not singling out Admiral directly, the market interpreted the regulatory scrutiny as a warning for the entire sector, contributing to the dip in the company’s stock price.
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