Not upheld: unfair pricing and misleading policy information complaint against American International Group UK Limited (AIG)

Decision detail

Summary

Mrs W complained about a considerable premium increase on her family's direct surgery cash plan with AIG in 2025, despite cover levels remaining unchanged and no claims being made. She was also concerned about a £50,000 claim limit mentioned in communications. AIG explained the increase was a business decision applied to all policyholders with the same plan due to increased provision costs, and confirmed the £50,000 limit was an agent error. The ombudsman found AIG treated Mrs W fairly by applying the increase uniformly across all similar policyholders and that the premium increase was justified by increased costs of providing cover, therefore not upholding the complaint.

The Ombudsman's reasoning

The ombudsman found that while insurance premiums can increase for various reasons, AIG was entitled to make a business decision to increase costs if the cost of providing cover had increased. The key fairness test was whether AIG treated the policyholder the same as other consumers with the same cover in similar circumstances. AIG demonstrated it applied the increase uniformly across all policyholders with this plan type, not in isolation to Mrs W's policy. The factors Mrs W raised (no claims made, reduced real-terms benefit, early uptake to avoid age-related increases) were not the reason for the increase and did not demonstrate unfair treatment. The £50,000 limit was confirmed as an agent error with no such limit actually applying to the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website