Complaints against insurance firms up 38% in 2023

But financial advisers saw 45% dip in conduct-related claims against them

- Chor Khieng Yuit

Complaints against insurance firms shot up in 2023 while those concerning financial advisers fell.

Life insurers were the subject of 51 market conduct-related claims, as such complaints are termed, in 2023, up 38 percent from 2022.

Financial advisers fared far better with only 16 claims, down 45 per cent, noted the Financial Industry Disputes Resolution Centre (Fidrec).

Fidrec defines market conduct issues as any kind of misconduct, including misrepresentation, misselling, making product inappropriate and recommendations failure to adequately share or disclose key material information or risks.

The centre helps consumers resolve their disputes with licensed financial institutions, including banks, finance companies, life insurers and advisers, either through mediation, or failing that, via adjudication.

Chief executive Eunice Chua said that while Fidrec handles a relatively small caseload, she had heard anecdotally from the insurers that they still deal with "quite a large number of claims" directly.

Fidrec is typically the next port of call after disgruntled consumers fail to reach an agreement with their insurer or financial adviser.

Market conduct disputes arise because insurance agents or financial advisers earn a fee from selling a product to the client.

The commission-based model "creates conflict of interest", said Mr Eddy Cheong, chief executive of Havend, an insurance advisory firm that opened for business on Feb 27.