The number of insurance-related complaints directed to the UK’s Financial Ombudsman Services (FOS) fell during the 12 months ending March 31.

Insurance accounted for 10% (20,978) of all complaints to FOS during the period, compared to 12% (19,838) in the 2009 financial year.

But complaints concerning payment protection insurance (PPI) accounted for about half (104,597) of the total lodged complaints during the 2011 financial year. This compared to 30% (49,196) of complaints lodged in 2010.

PPI complaints were the highest ever lodged for a single product in the 10-year history of FOS.

In August last year, FOS introduced a new complaints-handling guidance procedure, which was challenged by the British Bankers Association in the UK courts.

During the legal hearings the number of PPI complaints soared, with up to 5000 new cases a week being received by FOS.

The banks lost the case and have decided not to appeal the judgement.

The bulk of insurance complaints (75%) were about sales and advice with 20% about claims. Only 5% of complaints were about an insurer’s administration.

While PPI complaints skyrocketed during the year, other areas of insurance also reported an increase in the numbers of complaints.

Motor insurance complaints rose by 6% during the year while travel insurance disputes were up 27%, but health and medical insurance fell by 13%.

FOS Chief Ombudsman Natalie Ceeney says the number of PPI complaints had pushed the number of complaints received to a new high.

“This year has been the busiest in our 10-year history – with more than 200,000 disputes referred to us and a million front-line enquiries.

“This reflects the increased confidence of an ever more diverse range of consumers getting in touch about a wider range of problems and issues.”

Apart from PPI claims, FOS resolved almost half of the other types of disputes within three months and the rest by six months.