These are the most complained about insurance companies in South Africa

The Ombudsman for Short Term Insurance in South Africa (OSTI) has published its annual report for 2018, pointing out the most complained about insurance companies in the country.

According to the report, the ombudsman resolved 9,474 complaints out of 9,779 formal complaints lodged in the review period. Nearly three quarters (65%) of cases were finalised within four months, it said.

This compares to 9,962 complaints that were resolved in 2017, with an average turn-around time of 131 days.  A total of R87.2 million was recovered for consumers.

Motor vehicle insurance had the highest total number of finalised complaints (48%). This was followed by homeowners insurance, at 21%.

Complaints relating to commercial insurance increased from 8% in 2017 to 9% in 2018, while household content insurance complaints decreased from 6% in 2017 to 5% in 2018.

The majority of motor complaints considered by the OSTI, at 74%, were for accidental damage, said Ayanda Mazwi senior assistant Ombudsman.

“This was also the case in 2017. Warranty and mechanical breakdown claims comprised 9%. Theft and hijack claims comprised 8%, a slight decrease from 9% in 2017,” she said.

“The primary cause for complaints was the amount offered for the settlement of claims. The disputes varied from the calculation of vehicle and/or salvage values, uninsured credit short-falls and accessories, excesses and the use of alternate or second hand part prices in calculating the repair amount, to name a few.”

Mazwi said that 61% of complaints considered by OSTI under homeowner’s insurance related to claims for damage caused by acts of nature.

These claims relate primarily to storm-related loss. In 2018, this figure dropped to 58%. “Theft and burglary claims, on the other hand, increased from 4% in 2017 to 6% in 2018,” she said.

Most complained about insurers

The ombudsman’s report highlights the insurers who received the most complaints but stressed that there are some caveats to the data.

Specifically, larger insurers invariably draw a proportionally larger number of complaints.

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

“Larger insurers issue proportionately more policies which cannot form the basis of a complaint to this office due to our jurisdictional limits.

“Thus, for example, when considering the percentage of complaints received by this office against a large insurer, the large insurer, upon a superficial analysis, therefore appears to attract a relatively low number of complaints,” the report’s authors said.

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 FSCA, the ombudsman said.

The clearest indicator of this is the number of complaints to this office per thousand claims received by an insurer (column five), it said.

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

However, this statistic should be considered in conjunction with the overturn rate – an indicator that the decision of the insurer with respect to a complaint was changed in some respect by the ombud with some additional benefit to the insured.

A high overturn rate indicates that an insurer may be treating clients unfairly – but the ombudsman noted that it is not always the case.

“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,” it said.

This is how major insurers performed:

  • Absa Insurance – 799 complaints
  • MiWay Insurance –  484 complaints
  • Old Mutual Insure – 636 complaints
  • Hollard Insurance –  535 complaints
  • Santam –  548 complaints
  • Standard Insurance –  549 complaints
  • Guardrisk Insurance – 526  complaints
  • OUTsurance –  345 complaints

Measuring by the highest number of complaints received per 1000 claims, these are the 15 most complained about insurers.

*Includes run-off.

Insurer Complaints per 1000 Claims received Share of claims received Complaints received Share of complaints received
Lion of Africa* 108.57 746 0.02% 81 0.91%
Lloyd’s 17.14 175 0.00% 3 0.03%
New National 11.61 21 529 0.61% 250 2.82%
Absa 5.92 134 943 3.84% 799 9.02%
Oakhurst 5.70 51 372 1.46% 293 3.31%
Santam Structured 5.60 41 599 1.18% 233 2.63%
King Price 5.27 81 146 2.31% 428 4.83%
MiWay 4.83 100 081 2.85% 484 5.46%
Standard 4.75 115 536 3.29% 549 6.20%
Chubb 4.71 1 486 0.04% 7 0.08%
Western National 4.53 23 796 0.68% 108 1.22%
Nedgroup 4.47 67 045 1.91% 300 3.39%
Allianz 4.41 453 0.01% 2 0.02%
Centriq 4.16 35 082 1.00% 146 1.65%
Budget 4.04 79 889 2.27% 323 3.65%

The tables below outlines the full dataset for South Africa’s short-term insurers:

Read: These are the most complained-about banks in South Africa

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These are the most complained about insurance companies in South Africa