The workplace of the Ombudsman for Quick-term Insurance coverage (OSTI) has revealed its annual report for 2020, displaying which insurance coverage firms in South Africa drew probably the most complaints final yr.
Edite Teixeira-Mckinon, chief government officer of the OSTI, mentioned that the workplace recorded a financial advantage of R119.5 million to shoppers who approached its workplace for help in 2020.
The workplace registered 11,095 new complaints, 7% greater than in 2019, and closed 10,805 complaints, 17.9% greater than in 2019.
Of all of the complaints registered in 2020, 786 complaints associated to Covid-19, with 562 regarding enterprise interruption insurance coverage, and 224 to journey insurance coverage. Covid-19-related complaints comprised 7% of all of the complaints registered in 2020.
Of the ten,805 finalised complaints, the bulk, at 36%, associated to motorized vehicle disputes. This was adopted by owners’/constructing disputes at 21%, industrial at 14%, and family contents at 5%. The steadiness of 24% associated to different kinds of cowl and basic coverage queries.
The criticism tendencies for OSTI in 2020 have been influenced, partially, by the nationwide lockdown and authorities rules set to fight the unfold of the Coronavirus, it mentioned.
As an illustration, the variety of motor vehicle-related complaints was 12% decrease than in 2019. Industrial complaints elevated by 5%, with the bulk regarding enterprise interruption claims.
“A few of the enterprise interruption complaints have been submitted in circumstances the place the insureds loved the prolonged enterprise interruption cowl for infectious/contagious illnesses. The difficulty was primarily whether or not the direct reason for the enterprise interruption was the government-imposed lockdown or Covid-19. Authorized certainty on the query of causation was sought,” the ombud mentioned.
The result of Covid-19-related enterprise interruption claims submitted in 2020 at the moment are being thought-about by insurers based mostly on courtroom selections.
Teixeira-Mckinon mentioned that of the R119.5 million recorded financial profit to shoppers, R5.5 million represents industrial affords that have been made by insurers and accepted by complainants regarding enterprise interruption claims.
These affords have been made by way of the interim fee reduction association between the business and the Monetary Sector Conduct Authority.
As with most ombudsman experiences, the variety of claims it receives about every firm is reflective of that firm’s shopper base. That’s to say, an organization with extra purchasers is prone to have extra claims directed to the OSTI, and the inverse can be true.
The report contains one other metric to higher gauge the dimensions of claims – a determine displaying what number of claims are obtained per 1,000 clients an insurer has.
Total, the ombud tracked 9,604 claims from clients, representing 2.52 claims per 1,000 people who find themselves insured with the listed teams. Of the 54 insurers listed, 22 had a declare fee increased than this.
Santam Structured Insurance coverage had the very best declare fee of 15.5 claims per 1,000 individuals. Constantia Insurance coverage, which had the very best variety of claims total, had a declare fee of 9.9 per 1,000 individuals.
There’s additionally a marked distinction between a declare, and a profitable declare.
Whereas an insurer like Normal Insurance coverage might have obtained a comparatively excessive variety of claims (685), and carries a declare fee of 5.5 per 1,000 purchasers (double the business fee), solely 11% of the claims finalised by the ombudsman truly ended up in favour of, or with some profit to the claimant.
Likewise, whereas Santam Construction Insurance coverage might have the very best fee of claims going to the ombudsman, solely 13% of the claims finalised by the OSTI have been to the shopper’s profit.
Utilizing this measure, throughout all finalised claims in South Africa, 17% resulted in favour of purchasers.
NMS Insurance coverage solely had one declare finalised by the ombud, and it was in favour of the shopper – so technically a fee of 100%. Nevertheless, insurers with the next variety of claims fared worse – akin to Lion of Africa and Mutual and Federal, the place virtually 70% of claims finalised by the ombud have been in favour of, or in profit to purchasers.
The desk beneath outlines all of the ombudsman’s findings, ordered by the declare fee. The p.c of finalised claims in favour of purchasers is included for larger context.