Insurance claims pay out R400m in a year

The two insurance ombuds resolved more than 18 000 complaints between them and reimbursed consumers with R400 million in the past financial year, with the ombud for longterm insurance (OLTI) recovering R200 million, while the monetary benefit for consumers from the ombud for short-term insurance (OSTI) amounted to R197.2 million.

These figures were part of the joint annual report.

According to the report, the office of the OLTI:

Received 17 379 written requests for help, exceeding the record of 14 198 set in 2020;

Received 8 163 complaints chargeable to the insurer;

Finalised 7 533 cases, compared to 6 512 in 2020;

Recovered R200.7 million for complainants in lump sums;

Awarded an additional R948 592 as compensation for poor service;

Finalised 91.9% of cases within six months.

According to the OLTI, the increase in the number of complaints is largely due to the effects of the Covid pandemic.

Complaints regarding funeral and credit life benefits increased in line with the increase in deaths at the end of 2020 and in 2021 due to Covid, as well as the increase in retrenchments and loss of income claims due to the pandemic.

Most complaints were about funeral cover (45%), life cover (30%), credit life cover (11%), disability (8%) and health (6%). There was a decrease in the number of complaints about disability (2%) and health (2%) benefits.

The office of the OSTI:

Received 13 162 complaints;

Registered 9 797 new complaints, 11% less than last year;

250 complaints were related to Covid;

197 were related to business interruption insurance;

62 were related to travel insurance;

Finalised 10 879 complaints, 0.7% more than in 2020;

Recorded a monetary benefit and value for consumers of R197.2 million;

Covid-related complaints made up 2.6% of those registered, compared to seven percent the year before;

31 complaints resulted from the civil unrest, looting and damage to infrastructure in KwaZulu-Natal and Gauteng in July 2021;

23 related to commercial lines and eight to personal lines insurance;

Ended the year with 3 052 open complaints, compared to 4 210 in 2020, mainly due to the seven percent increase in registered complaints in 2020 and the almost 12% decrease in registered complaints;

Finalised 70% of complaints within six months.

A total of 43% complaints related to motor vehicle insurance disputes, followed by complaints about homeowners’ or building insurance at 22%. Commercial insurance complaints made up 14% and household contents insurance six percent of complaints. The remaining 15% relates to other types of cover and general policy queries.

Although accident-related complaints declined from 73% in 2020 to 65% in 2021, it remained the main type of complaint in this category.