FCA imposes restrictions on Axa Partners over policyholder treatment

The Financial Conduct Authority has taken decisive action against Axa Partners UK, prohibiting the addition of new customers or corporate partnerships without written approval. This measure follows concerns over the firm’s treatment of policyholders and its claims handling practices. The restriction, effective since 31 October, limits Axa Partners’ policy count to just under 6.5 million and requires monthly reporting to the regulator to ensure compliance with this cap.

Axa Partners UK, separate from Axa UK but ultimately part of the global French insurer Axa, offers home emergency, travel insurance, and breakdown cover. The company earned approximately €110 million in premium income last year and is considered a major presence in the travel and home insurance markets. The FCA imposed the voluntary restriction after Axa’s performance was highlighted in response to a super-complaint raised by Which, a consumer advocacy group.

Which expressed concern that insurers operating in the home and travel markets were regularly rejecting claims and failing to treat customers fairly, leading to some of the sector’s lowest payout rates. According to the FCA, last year saw 29 per cent of home insurance and 16 per cent of travel policy claims rejected, far outstripping the less than 1 per cent rejection rate in motor insurance. Issues with unclear policy language and inadequate communication of policy coverage came to light during a recent FCA review, particularly regarding claims related to storm damage for home insurance.

James Daley of Fairer Finance praised the regulator’s intervention but commented that a voluntary restriction allows insurers to avoid heavier sanctions or direct financial penalties. The FCA’s broader response to the super-complaint also includes two ongoing enforcement investigations and commissioned reviews of three insurers’ claims processes and internal controls.

Industry bodies and consumer groups have welcomed the intervention. Rocio Concha at Which described the FCA’s response as a necessary starting point for reforms aimed at ensuring home and travel insurance better serve the needs of policyholders. The regulator intends to evaluate the effectiveness of insurers’ policies in improving consumer understanding next year and to work with the sector on raising standards across the industry.

Axa Partners has confirmed its awareness of the restriction and will continue to cooperate fully with the Financial Conduct Authority as the process continues.