These are the most complained about insurers in South Africa
The Ombudsman for Short-Term Insurance (OSTI) has published its annual report covering the complaints received and finalised in 2022.
The OSTI noted “an exceptional increase” in the number of registered complaints in 2022. Up until June, the increase in newly registered complaints was 11% and, thereafter, it jumped to 21% in September, and then settled on 17.8% by the end of December.
The office of the ombud ended the year registering 17.8% more new complaints and finalising 4.3% fewer complaints when compared to 2021.
“We ended the year with 11,542 registered complaints, compared to 9,797 in the previous year, and closed 10,411 complaints compared to 10,879 in 2021,” it said.
The complaints took an average turnaround time of 122 days to resolve. The target was to have a maximum time of 120 days which meant that the body ended the year two days outside of the target.
Of the 11 542 complaints registered, 39 were Covid-19-related complaints, 57 were SASRIA-related complaints arising from the civil unrest in July 2021, 202 related to power surge complaints, and 647 related to the KwaZulu-Natal floods of April and May.
The ombud resolved complaints in favour of insurance customers to the tune of R109.5 million, with overturn rates between 13.75% and 32.65%, depending on the category of complaint.
Motor insurance complaints made up the biggest portion of complaints received, followed by home insurance, commercial insurance and household contents insurance.
Most complained-about insurers
As with most ombudsman reports, the number of claims it receives about each company reflects that company’s client base. That is to say, a company with more clients is likely to have more complaints directed to the OSTI, and the inverse is also true.
The OSTI stressed that just because a company received a lot of complaints, this isn’t necessarily reflective of its services. Big companies that serve a lot of customers will receive more complaints than smaller insurers with a small client base.
However, a company with a high overturn rate could indicate that the insurer is not treating its customers as fairly as it should, the ombud said.
But even this comes with a caveat: a high overturn rate can also be indicative of a high degree of co-operation being received by the OSTI from a particular insurer in resolving a complaint to the satisfaction of the customer.
“What is the more important statistic is the proportion of personal lines complaints relative to an insurer’s share of the total personal lines claims reported to the Financial Sector Conduct Authority (FSCA),” the ombud said.
To give a better idea of service levels, the report includes another metric to better gauge the scale of claims made against insurers – a figure showing how many complaints are laid with the ombud per 1,000 claims made against insurers as recorded by the FSCA.
Overall, in 2022, the ombud tracked 10,044 customer claims, representing 2.070 complaints per 1,000 claims against the listed groups. Of the 54 insurers listed, 24 had a complaint rate higher than this.
Santam Structured Insurance had the highest complaint rate of 13.2 per 1,000 claims.
The Land Bank Insurance (SOC) group had zero claims in the year – though the OSTI noted that it only tracks personal claim lines, not commercial lines, which could account for the zero claims.
The table below outlines the insurers, ranked by complaints per 1,000 claims received.
Beyond this data, the ombud also includes data on how many complaints were resolved by the OSTI, and what percentage of the matters were resolved with enforcement orders.
In terms of successful claims, of the 8,553 complaints finalised, 1,329 (around 15.5%) finalised by the OSTI ended with some form of benefit for clients. However, the vast majority of these were resolved “on transfer”.
This is where the complainant did not first approach the insurer to resolve the complaint. In such a case, the insurer is given an opportunity to resolve the complaint directly with the complainant and, if the complaint is resolved at this stage without OSTI’s intervention, the complaint is closed.
According to the ombud, 15% of cases were resolved through conciliation between the client and the insurer, and only 0.6% of matters were handled through an enforcement order.
The full data set as published by the ombud can be seen here.
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