Market intelligence provider Insurance DataLab has analysed data from the Financial Conduct Authority and highlighted that customers made more than 280,000 complaints about motor insurance in the second half of last year. This was up from just under 240,000 complaints for the same period the previous year. Insurance DataLab said that on average, insurers had paid out more than £115m annually over the past five years in redress for motor complaints.

Insurers upheld around 58% of cases over the second half of 2023, down from a high of 67% over the first half of 2022.

Insurance DataLab's Matt Scott said: “While the recent drop in upheld rates might seem positive at first glance, it raises concerns about the underlying issues insurers face. It is important to remember that these figures relate to internal complaints handled by the insurer, and when complaints are not upheld there are many that will be referred on to the Financial Ombudsman Service by the policyholder.

“And those referrals have been on the increase in recent years – as has the proportion of complaints being upheld by the ombudsman. So, while a falling upheld rate in the FCA figures may appear to be a positive for the industry, it may just be masking a problem if these decisions are later overturned by the ombudsman.”