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Which Insurers Received the Most Complaints?

The Ombudsman reported that Absa Insurance is the most complained about insurer of 2018, 2nd year running now.

Absa Insurance made up 9% of complaints within the total insurance industry with 800 complaints being put forward to the Ombudsman. Despite a large number of complaints received, the ombud found 18% of all Absa Insurance claims in favour of the customer.

The table below illustrates worst South African insurers of 2018:

Insurance Company Number of complaints per 1000 complaints Ruling in favour of unhappy clients by the Ombudsman
1.      Absa Insurance 5,9 18%
2.      King Price 5,3 17%
3.      Oakhurst 5,7 15%
4.      Standard 4,8 14%
5.      MiWay 4,8 11%
6.      NedGroup 4,5 23%
7.      Budget Insurance 4,0 11%
8.      Old Mutual 3,7 19%
9.      Dial Direct 3,3 9%
10.  First for Women 2,8 15%

 

Who came out on top?

And now for some good news, here are the top insurers in South Africa as per the 2018 report:

Insurance Company Number of complaints per 1000 complaints Ruling in favour of unhappy clients by the Ombudsman
1.      Outsurance 1,3 6%
2.      Santam 1,5 17%
3.      Discovery 1,8 14%
4.      Auto & General 1,8 13%

Santam and Outsurance were ranked as the top two insurers for the 2018 year according to the report.

Why are Insurance companies unable to resolve your complaints?

Millions of South Africans across the country part with thousands of Rands each month to ensure that their assets are covered by insurance companies, however, some consumers don’t receive the services they are promised.

The Ombudsman for Short Term Insurance, otherwise known as OSTI, released their latest 2018 annual report and the facts are frightening.

This report highlights the resolutions and disputes which have taken place over the last year within the insurance industry.

OSTI reported that 9 779 formal complaints had been recorded for the year, however out of those, a staggering 9 474 complaints were resolved by the Ombudsman. This means that consumers are paying insurers and then many of these companies are failing to deliver.

The Facts

Despite the many complaints received by the Ombudsman, OSTI has reported that they have recovered over R87 million for consumers this past year. This is on par with 2017’s report, whereby 9 962 complaints were closed and a little over R87 million was recovered.

Although the Ombudsman has managed to salvage millions of Rands, it remains to be seen that OSTI’s overturn rate was at 18% for 2018.

Motor vehicle complaints made up a whopping 48% of all complaints in 2018, with homeowner’s insurance coming in at 21% respectively.

The report outlines that roughly two-thirds of complaints were related to an insurer’s decision regarding a claim.

It stated that: “the primary cause for complaints was the amount offered for the settlement of the claims”.

Why are your claims rejected?

According to a follow up report by the Financial Intermediaries Association of Southern Africa, 36% of rejected claims were based on the exclusion or warranty in the policy or terms.

FIASA further mentions that “the report points out that consumers do not know or understand material terms and conditions contained in their policy documents. This highlights the need for policy documents to be drafted in clear and simple language.”

This report explains that insurers need to be more transparent with their customer’s otherwise further claims will be rejected.

OSTI recommends that consumers take note of the fine print of their policy documents in order to avoid a rejected claim. They also recommend that customers clarify any clauses that they are unsure of before a claim is laid. This will avoid the mission of submitting a complaint to the Ombudsman should the claim be rejected.

OSTI has, over the past year, made changes to the complaints submission process in order to ensure that submitting a complaint is easy for the customer.

“Increasing levels of awareness, although still low, have resulted in increased customer demand and expectations when it comes to dispute resolution by ombud schemes. There are greater expectations of speed, simplicity and online assistance,” explains Deputy Ombudsman, Edite Teixeira-Mckinon in the report.

South African Customer Satisfaction Index

According to the latest Customer Satisfaction Index conducted by Consulta on short-term insurers, customer satisfaction is on a steady decline. This comes after the rise in niche market insurers taking over the market and providing consumers with better service which is specific to their needs.

These are the overall conclusions made in the Consulta report:

Once again, Outsurance and Santam prove to be the leaders in the short-term insurance customer satisfaction sector. These insurers follow Virseker insurance which takes the top spot in the report.

It should also be noted that the industry loyalty score dropped from last year’s 68,1% to this year’s 64,9%. This may be due to customers unhappiness towards an increase in insurance fees and costs.

So now that the figures have been revealed, are you truly happy with your insurer?

*OSTI released a statement in response to their annual 2018 report which states: “No adverse conclusions should be drawn against any insurer based purely on the number of complaints against them received by this office. OSTI is an independent organization established to resolve disputes between insurers and consumers. Both parties are encouraged to make use of this service without fear of reputational harm.”

 

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