Formal complaints to the Insurance Ombudsman rose by 24 per cent last year, with motor and life policies combining to generate two-thirds of the disputes handled.

In her annual report for 2001, presented yesterday, Ombudsman Ms Caroline Gill, said she had received 1,285 written complaints over the year, of which 424 related to life policies and 349 to motor insurance issues.

The next most contentious area was travel insurance, which produced 118 complaints, up from 73 in 2000. Ms Gill formally adjudicated in 476 cases, of which 41 per cent were upheld. This compares to 42 per cent in 2000. An additional 225 complaints were settled with assistance from the Ombudsman's office or were clarified for both parties, while 347 cases were outside the terms of reference of the Ombudsman. The average handling time for a complaint was four months.

Awards made under the scheme varied between £100,000 (€126,974) and £250, with the highest award made in respect of a death benefit case. Ms Gill said the average award came in around the £5,000 mark.

Ms Gill yesterday welcomed the "very significant growth" in the use of the Ombudsman scheme, saying that her office had responded to 9,134 telephone calls last year, an increase of 30 per cent on 2000. A significant number of inquiries began by e-mail before progressing to more formal means, Ms Gill said. The cost of running the Ombudsman's office rose by 24 per cent to £612,815 in 2001, with funding coming from the insurance industry.

Ms Gill said her office's budget could be expected to rise in line with its widening ambit to include Irish Brokers' Association (IBA) cases, a development which should come on track this year. IBA matters are likely to generate an additional "couple of hundred cases every year", said Ms Gill.