Ombud cautions insurers against hyping favourable stats

INSURERS should be careful in their marketing campaigns about emphasising favourable complaints statistics, because it detracts from her office’s true function and purpose, says Deanne Wood, the Ombudsman for Short-term Insurance.

In her speech at the launch last week of her office’s annual report for 2017, Wood said the purpose behind publishing insurer statistics was to encourage consumer mindfulness within the industry and to provide greater transparency of the extent to which the ombudsman is called upon to resolve complaints.

“This objective has been achieved, and the publication of the insurer statistics has served its purpose well. However, I am concerned that, in recent years, the focus of the ombudsman’s value to the industry has become overshadowed by a number of insurers’ quest to achieve the best (or, at least, what is perceived to be the best) statistical outcome.

“While I understand that there is a significant degree of marketing kudos for an insurer that is able to boast that it has the lowest overturn rate and complaints submission ratio, I believe that this type of thinking loses sight of our true function and purpose.

“I am not suggesting that low statistical results ought to be negatively construed. What I am instead suggesting is that this is not an area that deserves the attention that it draws. Instead, the focus of the ombudsman’s value to the industry ought to lie in the extent to which it is able meaningfully and effectively to support, encourage, sustain and develop relationships between consumers and insurers.

“Insurers ought not to fear that their businesses will be negatively impacted if my office is called upon to determine complaints made against them. Likewise, they ought not to suffer negative public perceptions simply because recommendations are made against them or complaints are resolved with some benefit to consumers.

“They should also know that systemic issues or abuses will be ringfenced and identified, and that they will be held to account for these.

“In short, without shrinking from their own responsibility to resolve disputes with their customers, insurers should encourage and feel confident about the impartial and independent intervention of the ombudsman in the resolution of disputes,” Wood said.