There has been a “marked increase” in denied and withdrawn general insurance claims, according to the latest report from the General Insurance Code Governance Committee.

The report shows in the 12 months to June last year, 51.83 million general insurance policies were purchased, with the majority (48.14 million) in personal lines.

Consumers and businesses lodged 4.24 million claims in the year, up 8% compared with the previous year.

Declined claims were up 17% to 129,386, while withdrawn claims soared 65% to 217,438.

The committee, which is independent but supported by the Financial Ombudsman Service, says a lack of consistent data makes this trend “difficult to interpret”.

“We acknowledge the increase may reflect a range of factors, among them increased encouragement for consumers to lodge claims even where they are likely to fall outside of the policy,” the report says. “However, the trend may also signal problems, such as gaps in consumers’ understanding of the products they are buying and lack of knowledge of internal dispute resolution options.”

The committee says even though more claims were refused, consumers raised fewer internal disputes about declined claims, and the proportion of dispute outcomes in their favour also fell.

It reports “virtually no change” in the number of general insurance disputes received from consumers during the same period.