Insurance ombuds recover R330m for consumers

THE OFFICES for the Ombudsman for Short-term Insurance (Osti) and the Ombudsman for Long-term Insurance (Olti), which operate under a single insurance ombudsman, jointly clawed back more than R330 million for consumers in 2022.

This is revealed in the latest joint annual report of the two schemes, released last week.

In 2022, the Olti recovered R220 836 922 for complainants in lump sums and an additional R857 544 was awarded as compensation.

Over the same period, the Osti reported it had awarded R109 439 635 to consumers who had approached the office for assistance.

Long-term insurance

“In general, the reported numbers for 2022 were lower than those of 2021, which is not surprising given that the brunt of the Covid-19-related insurance claims was felt in 2021,” reports Denise Gabriels, the deputy ombudsman for long-term insurance.

“The 16 476 written requests for assistance received in 2022, although lower than the 17 379 received in 2021, still exceeded the then record of 14 198 set in 2020.

“Of these, 7 126 were chargeable complaints, compared to 8 163 in 2021.

“Including transfers closed (complaints referred back to and dealt with by the insurer concerned), we finalised 7 034 cases, compared with 7 533 in 2021.

“Of the cases finalised, 3 510 were full cases and 29% of these were resolved wholly or partially in favour of complainants.”

Almost half the complaints (48%) concerned funeral policies. Life policies

accounted for 31% of complaints; followed by credit life insurance (8%), disability insurance (8%) and health cover (5%).

About 45% of complaints across the various types of policies concerned claims being rejected by the insurer on the grounds of policy terms or conditions not being recognised or met.

Poor service or poor communication was the second-highest category of complaints (34%).

Other categories included complaints about policies lapsing (9%) and claims being rejected on the grounds of non-disclosure by the policyholder (5%).

Edite Teixeira-Mckinnon, the chief executive of the Osti’s office, said that

of the 11 542 complaints registered by the Osti during the 2022 financial year, 39 were Covid-19-related, 57 were Sasria-related arising from the civil unrest in July 2021, 202 related to power surges, and 647 related to the KwaZulu-Natal floods of April and May 2022.

She reports that the Osti ended the year registering 17.8% more new complaints and finalising 4.3% fewer complaints when compared with 2021.

“We ended the year with 11 542 registered complaints, compared with 9 797 in the previous year, and closed 10 411 complaints compared with 10 879 in 2021,” she said.

Teixeira-McKinnon said that despite the substantial increase in complaints, the average number of days taken to resolve complaints decreased from 138 days in 2021 to 122 days last year.

Of the 10 411 cases closed in 2022, 42.7% related to motor vehicle cover, 23.3% to homeowner’s cover, 13.6% to commercial insurance, and 5.9% to household contents cover. The remaining 14.5% related to other types of short-term insurance, including travel policies.

Motor vehicle cover has traditionally attracted the bulk of complaints.

Insurers that had the highest rate of complaints per 1 000 claims were: Santam Structured Insurance (13.22/1 000), New National Insurance (8.91/1 000), Old Mutual Insure (5.86/1 000), Nedgroup Insurance (5.25/1 000) and Standard Insurance (5.04/1 000).

Outgoing judge

The Insurance Ombudsman heading both long-term and short-term offices, Judge Ron McLaren, retired at the end of 2022. He is succeeded by Judge Margie Victor.

Gabriels and Teixeira-McKinnon paid tribute in the report to the outgoing Judge McLaren, who “will be remembered for his guidance, integrity and fairness, and respect for the dignity of all persons”.

If you have an insurance complaint, first try to resolve it with your insurer. If unsuccessful, you may lodge a complaint with either the Ombudsman for Short-term Insurance (website www. osti.co.za, call 0860 726 890 or email info@osti.co.za) or Ombudsman for Long-term Insurance, (www.ombud. co.za, call 0860 103 236 or email info@ ombud.co.za).