Ombudsman takes stock of short-term insurance complaints

2014-06-06 16:47

Absa Insurance had the most complaints before the Ombudsman for Short Term Insurance last year, according to the Ombudsman’s 2013 annual report.

The recently released statistics do not include businesses, and only look at individual and family protection.

Ombudsman Dennis Jooste received 839 complaints from Absa Insurance customers.

Santam was the short-term insurance company with the second most complaints – 744. Mutual and Federal came in third with 635. OUTsurance came in fourth position with 624 complaints, and Hollard Insurance came fifth with 503 complaints.

Jooste urged caution in analysing the figures.

“No adverse conclusions should be drawn against any insurer based purely on the number of complaints against them received by this office.

“Larger insurers issue proportionately more policies that cannot form the basis of a complaint to this office than do smaller insurers,” he said, adding that a more accurate picture would be to look at the number of complaints per 1 000 claims received by an insurer.

“Where an insurer receives a high number of complaints to this office per 1 000 claims, this may be an indicator that claims are dealt with unfairly by the insurer,” he said.

Using this measurement, the above mentioned companies look better and the smaller ones start to show their true colours.

Ace Insurance, with 19 complaints per 1 000, had the highest number of complaints, followed by King Price Insurance with 18 complaints per 1 000.

Another measure that is important is the overturn rate per insurer, which shows how many claim decisions by the company were overturned by the Ombudsman.

“If a high overturn rate is registered, this may, but not necessarily, indicate that the insurer is not treating its customers as fairly as it should. However, the overturn rate should be treated with considerable caution as a high overturn rate can also be indicative of a high degree of co-operation being received by the Ombudsman’s office from a particular insurer in resolving a complaint to the satisfaction of the customer,” said Jooste.

The average overturn rate was 33% and OUTsurance was one of the few direct insurers that were way below that mark with an overturn rate of about 14%.

OUTsurance CEO Ernst Gouws said they were happy with the statistics of the Ombudsman.

“At OUTsurance, we view our responsibility to pay claims promptly and fairly as the most important thing we do,” he said.

“In all insurance, the rubber really hits the road when you claim. In this very competitive market, you can save money by shopping around, but you would be wise to also double check independent statistics like what the Ombudsman makes available. Your insurer needs to be there when you need them most.”

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