Short-term in­sur­ance om­bud re­turns R100m to con­sumers

The om­buds­man’s of­fice re­cov­ered slightly less money for pol­i­cy­hold­ers in 2016 than it did in 2015, be­cause the of­fice fi­nalised fewer com­plaints last year. re­ports

Weekend Argus (Saturday Edition) - - FRONT PAGE -

The Om­buds­man for Short-term In­sur­ance, Deanne Wood, re­cov­ered just un­der R100 mil­lion for con­sumers last year, only marginally less than in 2015, ac­cord­ing to the om­buds­man’s an­nual re­port for 2016, re­leased this week.

Last year’s fig­ure was R99 139 593; in 2015 it was R100 712 182.

These amounts are down from those re­cov­ered in 2013 (R118 937 888) and 2014 ( R116 249 665), while the to­tal num­ber of com­plaints re­ceived by the om­buds­man’s of­fice has ranged from 13 278 in 2013 to 14 916 last year.

“The re­duc­tion in the rand re­cov­ery can be ex­plained by the con­comi­tant re­duc­tion in the num­ber of files closed in 2016,” says Wood, who suc­ceeded Den­nis Jooste as om­buds­man in March last year.

Of the 14 916 com­plaints re­ceived last year, 10 175 were reg­is­tered as for­mal com­plaints, and of these, 8 631 files were closed. In 2015, of the 14 136 com­plaints re­ceived, 9 784 were reg­is­tered as for­mal com­plaints, and of these, 9 944 were closed. In other words, 1 313 fewer com­plaints were closed last year than in 2015.

Wood re­ports that the av­er­age turnaround time per com­plaint “re­mains within com­mend­able lev­els, at 91 days”.

More than a third of com­plaints were re­solved in less than 60 days, and only 6% of com­plaints took more than 180 days to re­solve.

The om­bud’s of­fice pri­mar­ily deals with per­sonal lines cover – in other words, in­sur­ance for in­di­vid­u­als, such as ve­hi­cle, home­owner’s, house­hold con­tents, and all risks cover. It has ju­ris­dic­tion for per­sonal lines cover up to R2m, ex­cept for home­owner’s claims, which can be up to R4m.

It has lim­ited ju­ris­dic­tion over com­mer­cial lines poli­cies, although this type of in­sur­ance makes up a small per­cent­age of com­plaints (7% in 2016).

Mo­tor ve­hi­cle claims at­tracted the most com­plaints, at al­most half of the com­plaints re­ceived by the om­buds­man’s of­fice last year (see graphic, right).

The re­port pro­vides the claims and com­plaint statis­tics of all the 55 in­sur­ance com­pa­nies over which the of­fice has ju­ris­dic­tion. From these you can get some idea of which in­sur­ers have more prob­lem claims among their pol­i­cy­hold­ers – par­tic­u­larly from the num­ber of com­plaints per thou­sand claims and the over­turn rate (which re­lates to when the om­buds­man over­turns In 2016, the of­fice of the Om­buds­man for Short-term In­sur­ance, Deanne Wood: • Re­ceived 14 916 com­plaints; • Reg­is­tered 10 175 of these as for­mal com­plaints; • Closed 8 631 com­plaints; • Re­solved com­plaints partly or wholly in favour of the con­sumer in 27% of cases; • Took an av­er­age of 91 days to close a com­plaint, with a third of com­plaints closed within 60 days; and • Re­cov­ered R99 139 593 for con­sumers, of which about 60% (R59 238 533) was for mo­torve­hi­cle in­sur­ance claims. an orig­i­nal claim de­ci­sion by an in­surer).

The om­buds­man notes: “Where an in­surer re­ceives a high num­ber of com­plaints per thou­sand claims, this may be an in­di­ca­tor that claims are dealt with un­fairly by the in­surer. How­ever, this statis­tic should be con­sid­ered in con­junc­tion with the over­turn rate. The over­turn rate is an in­di­ca­tor that the de­ci­sion of the in­surer was changed in some re­spect by this of­fice, with some ad­di­tional ben­e­fit to the in­sured.”

But the om­buds­man says the over­turn rate should also be treated with cau­tion, “as a high over­turn rate may in­di­cate a high de­gree of co-op­er­a­tion re­ceived by the om­buds­man’s of­fice from a par­tic­u­lar in­surer in re­solv­ing a com­plaint”.

The ta­ble (right) pro­vides the 10 in­sur­ers with the high­est num­ber of com­plaints per thou­sand. The av­er­age over­turn rate among all the in­sur­ers was about 27%.

Although Compass In­sur­ance had the high­est com­plaints rel­a­tive to claims (about 30 per 1 000), its over­turn rate was rel­a­tively low, at 9.38%. Five of the in­sur­ers in the ta­ble, on the other hand (Western National, Oakhurst, New National, Absa and Stan­dard) had rel­a­tively high com­plaints per thou­sand claims. In ad­di­tion, they had above-av­er­age over­turn rates.

Among the big­ger in­sur­ers with the most favourable statis­tics on how they treat their pol­i­cy­hold­ers’ claims are Con­stan­tia In­sur­ance ( 1.07 com­plaints per thou­sand claims and an 11.36% over­turn rate) and Out­surance (1.62 and 11.63%).

Wood says in her re­port that qual­ity out­comes are es­sen­tial to the proper func­tion­ing of an om­bud scheme.

“It is there­fore im­por­tant that con­sumers feel lis­tened to, are given a clear and ac­cu­rate ex­pla­na­tion of the out­come of their com­plaint and feel that their mat­ter has been ad­dressed in a fair, com­pre­hen­si­ble, cor­rect and im­par­tial way.

“At the op­po­site end, in­sur­ers should feel con­fi­dent that the of­fice op­er­ates as an ex­ten­sion of their own qual­ity as­sur­ance to their clients. In­sur­ers are also en­ti­tled to have their po­si­tions heard and their rea­son­ing and ra­tio­nale prop­erly con­sid­ered,” she says.

martin.hesse@inl.co.za

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