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Most firms don’t lack effort. They lack a clear definition of “good”.
Complaints leaders across the insurance sector have spent the last few years responding to an increasingly demanding set of expectations. Consumer Duty has sharpened the focus on customer outcomes. The Financial Ombudsman Service continues to provide valuable insight into emerging complaint trends. Boards are asking for greater assurance that customer issues are being understood and addressed before they become systemic problems.
Against this backdrop, most complaints functions are working harder than ever. Yet many organisations continue to struggle with a fundamental question: what does a good complaints operating model actually look like?
The challenge is not a lack of effort, commitment, or investment. In many cases, complaints teams have seen additional resources, enhanced governance, and new technology introduced. The problem is that “good” is often defined in narrow operational terms, focusing on measures such as turnaround times, productivity, or backlog reduction. These metrics matter. But they do not tell the whole story?
A complaints function can consistently meet service levels while still failing to identify systemic issues. It can achieve strong productivity levels while generating inconsistent customer outcomes. It can remain compliant with minimum regulatory requirements while providing little strategic value to the wider business.
The most effective complaints operations understand that good is not simply about handling complaints efficiently. It is about creating a framework that consistently delivers fair outcomes, identifies risks, and drives organisational improvement.
Moving beyond compliance
Historically, many firms viewed complaints handling as a necessary regulatory obligation. Success was often measured through a compliance lens: meeting DISP requirements, maintaining audit readiness, and ensuring responses were issued within prescribed timeframes.
However, regulatory expectations have evolved. Today’s environment places greater emphasis on understanding outcomes rather than simply demonstrating process adherence. Firms are increasingly expected to evidence how complaint insights are used to improve products, services, communications, and customer experiences.
Rather than asking whether a complaints process is compliant, organisations should be asking whether it is effective. Does it consistently deliver fair resolutions? Does it identify customer harm quickly? Does it influence business decisions? Does it provide meaningful assurance to senior leaders?
The operating model question
A common characteristic of high-performing complaints functions is clarity in operating model design. Many organisations have evolved organically over time. As complaint volumes increase, new teams are created. Specialist handlers are added. Escalation routes are introduced. Governance structures expand.
The result is often an operating model that reflects years of adaptation rather than deliberate design. This creates several risks. Accountabilities become unclear. Processes vary between business areas. Management information lacks consistency. Root cause analysis becomes fragmented. Decision-making slows down.,
By contrast, effective complaints operating models are designed around clear principles. They define ownership across the entire complaint lifecycle. They establish clear accountability for customer outcomes. They create consistent standards while remaining flexible enough to accommodate complexity. Most importantly, they connect complaints handling with wider organisational objectives.
This alignment is increasingly important in insurance, where customer journeys often span multiple products, channels, systems, and teams. A complaint rarely reflects a single process failure. More often, it reveals weaknesses across product design, communication, service delivery, or governance. The operating model must therefore be capable of identifying issues across organisational boundaries.
Measuring what matters
One of the most common weaknesses within complaints functions is measurement. Most organisations collect large volumes of data. The challenge is determining whether the information being measured is genuinely helping leaders understand performance.
Traditional metrics such as complaint volumes, closure rates, aging profiles, and service-level attainment provide useful operational insight. However, they offer limited visibility into whether customers are receiving consistently fair outcomes.
That is where leading organisations are beginning to differentiate themselves. They are increasingly incorporating measures that focus on quality, consistency, and organisational learning. Examples include:
- Outcome consistency across handlers and teams.
- Repeat complaint rates.
- Root cause action completion rates.
- Customer vulnerability identification.
- First-time resolution success.
- Complaint reduction linked to corrective actions.
- Ombudsman overturn rates.
- The effectiveness of remediation activity.
These measures provide a much richer understanding of performance than volume and productivity metrics alone. More importantly, they help firms assess whether changes are having a meaningful impact on customer outcomes.
What good really looks like
The strongest complaints operating models share several common characteristics:
- They are aligned to regulatory expectations but are not driven solely by compliance.
- They have a clearly defined operating model with understood accountabilities.
- They measure customer outcomes with the same rigour as operational performance.
- They use complaints data to inform strategic decision-making.
- They treat root cause analysis as a catalyst for change rather than a reporting exercise.
- And perhaps most importantly, they have a shared organisational understanding of what success looks like.
Many firms invest considerable effort improving individual components of their complaints function. They enhance training, introduce technology, strengthen governance, or redesign processes. These are all worthwhile initiatives.
However, sustainable improvement rarely comes from isolated interventions. It comes from defining what good looks like across the entire operating model and ensuring people, processes, technology, governance, and measurement are working towards the same objective.
In an environment where customer outcomes are under increasing scrutiny, that clarity may become one of the most important differentiators a firm can have.