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Blogs · July 2026

What does poor claims service actually cost an insurer?

The bill does not arrive as a line on the P&L. It arrives as complaints you defend, claims people abandon, and customers who quietly renew somewhere else.

The short answer: it costs you three ways, and none of them appear as a line on the accounts. Customers walk away mid-claim. Complaints escalate to the Ombudsman, where they cost you time and money whichever way they land. And the policyholder you disappointed at the worst moment of their year does not argue with you at renewal, they simply do not come back. All three are countable, and many insurers have never added them up.

Where does the money actually go?

Ask a Head of Claims what a slow claim costs and you get the handling cost. That is the smallest part of it.

People give up on claims they are entitled to. In its review of home and travel claims handling, the FCA found that 19% of storm-claim customers walked away without pursuing the claim. That is not a fraud saving. That is a customer who had cover, had a loss, and gave up on you.

Complaints are expensive whoever wins them. They land on your desk either way. The Financial Ombudsman Service received 45,606 new insurance complaints in 2024/25, and upheld 38% of them. Buildings insurance alone accounted for 7,321 complaints, with 41% upheld. Car and motorcycle insurance was the most complained-about insurance product at 14,082. Every one of those is handler time, management time, and a case fee, before you get to the settlement.

And the churn is quiet. Consumer Intelligence found 13% of home and 8% of motor policyholders moved provider after a negative claims experience. They do not tell you why. They just go.

Is it really a service problem, or just hard claims?

The regulator has been explicit about this, and the finding is worth sitting with.

In the same review, the FCA identified "claims service and delivery" as the main root cause of complaints, and named the specific failures: firms managed expectations on timescales poorly, and did not keep customers updated on the progress of their claim. Not the decision. Not the settlement figure. The service around it.

That distinction matters because it changes what you have to fix. If your complaints were about coverage decisions, you would need to change the policy or the appetite. They are not. People are complaining that nobody told them what was happening.

One more finding from that review shows the scale: over a quarter of firms upheld more than 70% of their service-related complaints. A firm that upholds seven in ten is not weighing a grey area. It is agreeing it got it wrong.

Why does it keep happening to well-run teams?

Because the demand is spiky and the staffing is flat.

A storm does not book an appointment. A burst pipe at 11pm, a car written off on a Sunday, a holiday cancelled on a bank holiday Friday: the loss happens when it happens, and the contact centre is staffed to a forecast. When the queue spikes, the calls that get abandoned are not the easy ones, they are the ones from people at the worst moment of their year.

Then the follow-up slips. Not because anybody is lazy, but because chasing every open claim with a status update is a job nobody has time for, on top of the claim itself.

Can you actually put a number on it?

Yes, and you should do it before you talk to any supplier, including us.

Pull four numbers out of the systems you already run:

  • How many inbound claims calls were abandoned last month, and what happened to those callers. Did they call back? Did the claim ever get registered?
  • How many claims are open with no customer contact in the last seven days. That is your complaint pipeline, visible in advance.
  • Your uphold rate on service-related complaints. If it is high, you already agree the service was poor.
  • Retention on policies that had a claim in the last year, against those that did not.

We will not quote you an industry benchmark for abandoned calls or out-of-hours demand, because there is no credible published UK figure for either. If a supplier offers you one, ask where it comes from. Your own telephony report has the real number, and it is the only one your board will accept anyway.

Where Atlantas.Ai fits

Atlantas.Ai answers the calls, emails, chats and messages your team cannot get to, grounded in your own policy wordings, claims process and complaints procedure.

  • It answers the call, including the 2am one and the Sunday-after-the-storm one, and takes the first notice of loss properly rather than leaving a voicemail.
  • It keeps claimants updated without a handler having to remember, which is the failure the regulator has been pointing at.
  • It hands over to a person the moment a claim is contested, a customer is vulnerable, or a complaint starts. With the full context attached, so the customer does not start again.

It runs alongside the telephony, CRM and claims platform you already have. It does not replace your handlers, and it does not decide claims.

Frequently asked questions

Does an AI agent decide claims?

No. Atlantas.Ai takes the notification, answers questions from your own documented process, and keeps people informed. Decisions stay with your handlers and loss adjusters.

Is this just a chatbot on the website?

No. It covers voice, email, chat and social, all answering from one knowledge base, so the answer a customer gets on the phone matches the one they get by email.

We already have an out-of-hours line. Why change?

Ask what it actually does. Most take a message. If the message becomes a callback the next working day, you still have the delay the FCA is criticising.

Sources

See Atlantas.Ai answer for your own book.

Every call, email, chat and message, grounded in your own policy wordings, with a person on hand the moment a case needs one.