Insurance ombuds put R400m back in consumers’ pockets

Consumers were awarded almost R400-million in the last year by the offices of the ombudsman for long-term insurance and the ombudsman for short-term insurance, with just under R1-million awarded by the short-term insurance ombudsman for poor service on the part of insurers.

Speaking at the release of a joint annual report for the two offices for 2021, Denise Gabriels, the deputy ombudsman for long-term insurance, said her office had received a record 17,379 written requests for assistance. Of these, 8,163 turned out to be viable complaints and 7,533 cases were finalised. 

A total of R200.7-million was recovered for complainants in lump sums and an additional R948,592 was awarded to complainants as compensation for poor service.  

Gabriels attributed the increase in the number of complaints to the effects of the Covid-19 pandemic, as insurers have widely reported on the increased number of claims. She also noted that the increase in poor service was exacerbated by conditions where many insurers had staff working from home with challenges related to accessing information and documentation.

Understandably in a post-Covid environment, complaints relating to funeral and credit life benefits increased, accounting for 45% and 11% of total complaints, respectively, while life insurance complaints decreased from 34% to 30% of total complaints and disability insurance complaints slipped from 10% to 8% of total complaints.

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Unreasonable behaviour

Gabriel’s office has taken a hard stance on unreasonable behaviour from complainants and insurers in the last year. While complainants are understandably upset and frustrated by the time they lodge a complaint with the ombudsman’s office, there are now clear guidelines on what is acceptable and what will not be tolerated.

Unreasonable behaviour from complainants includes:

• Dishonest, frivolous, vexatious, threatening and abusive conduct. Examples include offensive language, any form of discrimination, inflammatory statements and threats of violence, whether direct or veiled.


• Unreasonable demands, such as insistence on a response or action, other than in accordance with the usual complaints resolution procedure. This includes insistence on communicating with a particular member of staff, despite that person’s unavailability or the fact that they may not be the appropriate person.


• Excessive levels of contact, which include multiple letters and telephone calls or visits to the office, more particularly when such communication is out of line with the usual complaints resolution procedure.


• Inappropriate social media activity.

The office of the ombudsman for short-term insurance (Osti), on the other hand, failed to hit two operational targets for the last year.

Chief executive Edite Teixeira-McKinnon says her office had hoped to attain an average turnaround time of 120 days on complaints and to ensure that the number of complaints outstanding for six months did not exceed 10% of the number of open complaints. However, the office ended the year with an average turnaround time of 138 days, and with 332 complaints outstanding for six months, instead of 300.

The Osti office registered 9,797 new complaints, of which 259 were linked to Covid-19 – 197 relating to business interruption and 62 to travel insurance.

Complaints resulting from the civil unrest, looting and damage to infrastructure in KwaZulu-Natal and Gauteng in July 2021 were dealt with by the South African Special Risk Insurance Association (Sasria). A total of 31 Sasria complaints were registered last year, with 23 relating to commercial lines and eight relating to personal lines insurance.

The short-term insurance ombudsman ended the 2021 year with 3,052 open complaints, compared with 4,210 in 2020, the difference being primarily due to the 7% increase in registered complaints in 2020 and an almost 12% decrease in registered complaints last year. DM/BM

 

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