The Ombudsman for Short-Term Insurance (OSTI) has released its Annual Report on Operations for 2017.
According to the report, 9,962 complaints were resolved in the review period, with an average turn-around time of 131 days. A total of R87.1 million was recovered for consumers.
The highest category of claim-type was for motor vehicles, at 49%.
“This figure mainly comprised claims rejected on the grounds that the insured was driving under the influence of alcohol,” said Ayanda Mazwi, senior assistant Ombudsman.
“Some insurance companies have introduced measures such as the ‘take me home’ service to manage the risk associated with drunken driving.
“However, it is clear from this year’s statistics, that DUI remains a very real problem for the South African insurance industry,” she said.
This was followed by homeowners claims at 20%, while commercial claims contributed 7.9% to the total and household content claims, 6.2%.
Given the extreme weather conditions experienced in 2017, it’s not surprising to report that 61% of complaints under homeowners insurance related to storm damage and other acts of nature.
Theft and burglary amounted to 73% of the claims under household content insurance. Under commercial insurance 28% of complaints related to building claims and 25% to motor vehicle claims.
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.
To give a better picture of how different insurers compare, the OSTI provides various metrics, including the number of complaints it has received per 1,000 complaints received by the insurers themselves.
Where an insurer receives a high number of complaints to the ombud 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 notes 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 – 778 complaints, 21.7% overturned
- MiWay Insurance – 608 complaints, 8.6% overturned
- Old Mutual Insure – 608 complaints, 26.0% overturned
- Hollard Insurance – 601 complaints, 29.5% overturned
- Santam – 579 complaints, 21.6% overturned
- Standard Insurance – 499 complaints, 13.2% overturned
- Guardrisk Insurance – 480 complaints, 44.6% overturned
- OUTsurance – 366 complaints, 4.9% overturned
Measuring by the highest number of complaints received per 1000 claims, these are the 20 most complained about insurers.
A previous version of the table below incorrectly listed Compass Insurance as the most complained about based on the complaints per 1000 ratio. Two other insurers ranked higher than Compass according to the Ombudsman’s data, as is indicated in the corrected table below.
The table below outlines the full dataset for South Africa’s short-term insurers: