“During 2019, OSTI finalised a total of 9 167 formal complaints. The majority were in respect of motor vehicle claims at 49% followed by homeowners/building claims at 20%, commercial claims at 8% and household content claims at 6%, with the balance of 17% of complaints being non-claim related or related to other types of cover,” Ayanda Mazwi, Senior Assistant Ombudsman notes in the just-released Short-term Insurance Ombudsman’s Annual Report.
Key stats and insights per category
Motor vehicle claims
|●||The majority of these complaints, at 73%, were for accidental damage.|
|●||The primary cause for complaints related to claims settlement calculations.|
|●||The predominance of these disputes related to vehicle credit short-fall and uninsured accessories.
Learning: Consumers must ensure that their policies include cover for the credit short-fall and any financed accessories which have been added to the insured motor vehicle.
|●||The secondary cause for complaints was rejections based on the insured’s alleged non-disclosure or misrepresentation of underwriting details at the sales stage.
Learning: This illustrates again the importance of providing truthful and accurate information to the insurer during underwriting, as well as the insurer’s obligation to conduct the sales process by agreed industry codes of practice and the Policyholder Protection Rules.
|●||A decrease in complaints relating to rejections on the ground that the insured was driving under the influence of alcohol|
|●||19% of motor vehicle claim disputes were resolved in favour of the insured’s claim.|
Homeowners insurance claims
|●||54% of complaints under homeowner’s insurance related to claims for damage caused by acts of nature, largely storm-related. This figure dropped from 58% recorded in 2018.|
|●||The primary cause for complaints (30%) was the rejection of claims on wear and tear, gradual deterioration and lack of building maintenance being the proximate cause of the damage.|
|●||15% of homeowner’s insurance disputes were resolved in favour of the insureds’ complaint.|
Household content insurance claims
|●||Theft and burglary claims comprised 67% of complaints, a 4% decline compared to last year’s figure.|
|●||Claims settlement calculations remain the primary cause for complaints.|
|●||The secondary cause for complaints was rejections where the insurer’s underwriting criteria for the insured event were not met.|
|●||18% of household content insurance disputes were resolved in favour of the insureds’ complaint.|
Commercial insurance claims
|●||The majority of commercial complaints considered by OSTI related to motor vehicle (32%) and building (23%) claims.|
|●||18% of commercial insurance disputes were resolved in favour of the insured.|
‘Other’ & non-claim related policy complaints
OSTI notes that they often find that the primary cause for complaints under this category is the quality of the communications that take place between the insurer and the insured during underwriting and over the operation of the policy.
This category includes travel insurance, surely a category that will be impacted even more post-lockdown.
Click here to view an infographic and more detail about the statistical analysis of the ST complaints, as well as stats per insurer.
The outgoing ST Ombud, Ms Deanne Wood, did a sterling job in her tenure as ST Ombud, and has certainly set a high standard for her successor, Ms Edite Teixeira-Mckinon, as Chief Executive Officer of the OSTI. The latter has, according to Ms Wood, settled into this role “with confidence and ease” from 1 October 2019. We wish Ms Wood all the best in her future endeavours, and thank her for her significant role in professionalising services at the OSTI. At the same time, we wish Ms Teixeira-Mckinon all the best in her important function, and our full support in improving communication in the industry.