The Ombudsman for Short-Term Insurance (OSTI) has recently released statistics which for the first time show how many complaints have been laid against each personal lines insurer.
This was released in conjunction with its annual report in May, which showed that it had received 9 123 complaints against insurers in 2012, an increase of over 1,7% over 2011.
According to short-term insurance ombudsman, Dennis Jooste, the insurance industry had experienced a difficult year, with reported catastrophic losses of close to R2bn in 2012.
“Although the floods in Mpumalanga and Limpopo and hailstorms in Gauteng affected the underwriting results of insurers, by year end, they had not caused a major increase in the number of complaints received by our office,” says Jooste.
Most of the complaints received by OSTI involved motor claims (48,4% of all complaints), followed by householder’s (22%) and house owner’s claims (8%) – a pattern experienced for many years and which remained unchanged during 2012.
OSTI’s statistics from January 2012 to December 2012 is based on the figures provided by the Financial Services Board (FSB).
Insurers in the hot seat
The stats showed that the George-based Oakhurst Insurance had the highest rate of complaints with 37 complaints for every 1000 claims received.
Oakhurst’s group legal adviser, Naresh Tulsie, said they had in fact sent a higher number of claims to the FSB and this was not reflected in the ombudsman report.
“We usually have a good relationship with the ombudsman but it’s just unfortunate that the incorrect picture was painted by the report,” he said.
Tulsie added that because Oakhurst was a motor-specific insurer it would have higher claims than others because of the high car accident rates on the road.
“But this is the first time such a report was used and it will be a good benchmark for insurers to use to compare themselves to other insurance companies,” said Tulsie.
What will it mean for consumers?
Out of the 1000 claims made, Miway Insurance received five complaints. Of this amount only 22,07% of the overturn rate went in favour of the complainant.
Greta Goosen, head of client services at MiWay short term insurance, said the company welcomed the statistics, which promoted transparency, especially with the emergence of middle class insurance policyholders.
She added that because Miway did not have brokers as a filter for claims, they focused on the overturn rate rather than the number of complaints.
She also felt that the high number of complaints received by the ombudsman was a good thing because it showed that consumers were aware of their rights.
“We appreciate the feedback because this transparency will also educate this emerging market about short-term insurance.
There are some clients that don’t even know about what excess entails and in South Africa, the onus is on the insurance industry to educate consumers,” said Goosen.