“We received 11 768 written requests for assistance, including 5 978 chargeable complaints. In total, 3 367 cases were finalised, of which 31.5% were resolved wholly or partially in favour of complainants”, Judge Ron McLaren, Ombudsman for Long Term Insurance shares in the just-released 2018 Annual Report.
He highlighted the following:
- 91% of complaints were finalised within six months;
- the benchmark Standard Case fee was reduced from R3 707.00 in 2017 to R3 629.00 in 2018, a reduction of 2.8%; and
- the Key Figures over the last three years show a reassuring consistency.
|Written requests for assistance received||11 768|
|Chargeable complaints received||5 978|
|Full cases Finalised||3 367|
|Percentage of complaints finalised within six months||91%|
|Percentage of cases resolved wholly or partially in favour of complainants||31.5%|
|Cost per standard case||R3 629|
|Recovered for complainants||R185.8m in lump sums|
|Compensation awarded||R632 737 in 160 complaints|
|Transfers settled in favour of complainants||1 132|
Ombud’s new business model
The office’s new business model assisted with the finalisation of cases as Transfers, Reviews and Full Cases were included in the calculation.
Mini-cases – consist of simple complaints that are within the jurisdiction of the Ombud’s office, but which insurers can handle without the office’s involvement. The complainant is always advised that if the matter is not resolved he/she can revert to the Ombud. There are also some complaints which have no prospect of success. The assessing staff dismisses these complaints and explain the reasons for the dismissal to the complainants. These complaints are charged the reduced mini case fee.
Transfers – these are complaints not previously seen by insurers and referred to them to try and resolve directly with the complainant. If not resolved and if the complainant, when contacted by the Ombud office, requests the Ombud to do so, they are taken up by the Ombud office as Reviews and handled in the same manner as Full Cases.
Full cases – these are complaints that have already been seen by insurers and they are handled by the Ombud office from inception to finalisation.
According to the report, the “Claims Declined category” had the highest number of complaints, with the “Poor Service category” the second highest. McLaren pointed out that it is the same pattern as in previous years. “It is a matter of concern that more complaints about lapsing of policies were received, even though it might be caused in part by the tough economic situation. The high lapse rate of policies in the long-term insurance industry has always been problematic”, he mentioned.
McLaren further emphasised that during 2018 they started to record complaints according to the Treating Customers Fairly outcome categories as reflected in the new Policy Protection Rules:
- Design of policy or related service 8.7%
- Information provided to policyholders 9.4%
- Advice 1.0%
- Policy performance 4.2%
- Service to policyholders 12.7%
- Policy accessibility, changes or switches 1.8%
- Complaint handling 1.2%
- Insurance risk claims 58.2%
- Other complaints 2.7%
The report further shows that the percentage of cases resolved in favour of complainants increased slightly from 29% in 2017 to 31.5% in 2018. Funeral benefits made up 48.8% of the wholly or partially (“W/P”) cases. If the Transfers settled are added, then the W/P percentage increases to 40%. This is slightly higher than the percentage for the last few years, which was around 37%. R185.8 million was recovered for complainants in the form of lump sums. This figure does not reflect the value of other benefits, such as recurring income disability benefits, annuities and reinstatement of policies, etc.
More detail about some of the cases will be discussed in the next issue.
Click here to download the statistics.
The Ombud’s office deserves a lot of credit for conveying such useful information to the industry. Of particular importance is the comparison of complaints to the TCF outcomes, which apportions blame more specifically, rather than just picking on the low hanging fruit.