R400m in claims awarded by insurance body

THE Ombudsman for Long-term (life) Insurance and the Ombudsman for Short-term (non-life) Insurance, together put almost R400 million back in the hands of consumers who complained in the past financial year.

In a joint 2021 Annual Report, the Ombudsman for Long-term Insurance (OLTI) noted an increase in the number of claims, especially funeral and credit insurance claims from 2020 to 2021, and subsequently the number of complaints received also rose.

“The increase in the number of complaints can largely be ascribed to the effects of the Covid-19 pandemic, as insurers have widely reported on the increased number of claims,” Denise Gabriels, deputy ombudsman for Long-term Insurance, said.

The 17 379 written requests to the Office of the OLTI for assistance exceeded the record of 14 198 in 2020, as did the 8 163 chargeable (to the insurer) complaints received. Including transfers closed, 7533 cases were finalised, compared with 6 512 in 2020.

About R200.7m was recovered for complainants in lump sums and an additional R948592 was awarded to complainants as compensation for poor service.

“Our subscribing members – (like our staff) – also had to operate under challenging circumstances. Many had staff working from home, which had its own challenges of accessing information and documentation.

“Combined with an inordinate rise in the number of claims, especially funeral and credit insurance claims, this gave rise to many service-related complaints. Despite pockets of service lapses and poor complaints handling, in general the insurers responded well to the challenges,” said Gabriels.

She said the ravages of Covid-19 continued in 2021, with the third wave hitting particularly hard. Many employees contracted the virus, resulting in prolonged absences, and some lost close relatives.

The civil unrest in KwaZulu-Natal and Gauteng impacted on the national psyche, and in the Western Cape taxi violence prevented some employees in the Office of the OLTI from getting to work for several days. Blackouts further exacerbated the situation.

“Against this backdrop, the reported results are remarkable, and for this all tribute must go to the staff, who displayed resilience and perseverance, despite the adversity.”

The Ombudsman for Short-term Insurance (OSTI) said the monetary benefit for consumers amounted to R197 188 388.

Edite Teixeira-McKinnon, CEO of the office of the OSTI, said: “2021 was a year of struggles, continued resilience and hope for a brighter tomorrow. Going through two years of a harrowing pandemic has taught us that just surviving is not enough; we need to reshape ourselves for the future.”

The Office of the OSTI ended the year with 3 052 open complaints, compared to 4 210 in 2020, the difference being primarily due to the 7% increase in registered complaints in 2020 and the almost 12% decrease in registered complaints last year. OSTI finalised 10 879 complaints, 0.7% more than in 2020, and from the complaints finalised it recorded a monetary benefit and value for consumers of R197.1m.