In discussing the short term insurance industry figure Edite Teixeira-Mckinon, Chief Executive Officer: Ombudsman for Short Term Insurance said, “Within OSTI, we saw clear evidence of cohesion, togetherness and empathy in response to the COVID-19 challenge and our operational performance during 2020 is testament to this.” “In 2020, OSTI registered 11 095 new complaints, 7% more than in 2019, and closed 10 805 complaints, 17.9% more than in 2019. Of all the complaints registered in 2020, 786 complaints related to COVID-19, with 562 relating to business interruption insurance and 224 relating to travel insurance. COVID-19-related complaints comprised 7% of all the complaints registered in 2020. The highest number of COVID-19 complaints were registered during June, July and August. A new sub-category of complaints was added to our case management system to ensure total visibility of these complaints and a dedicated team of assistant ombudsmen was appointed to handle them in a timeous and consistent manner,” added Teixeira-Mckinon.

“We started the year with an average turnaround time of 141 days and by the end of the year the turnaround time decreased to 136 days. The six month list, which is a list of complaints outstanding for six months and longer, decreased from 739 in January to 575 at the end of December,” continued Teixeira-Mckinon. OSTI, according to Teixeira-Mckinon, recorded a monetary benefit and value to consumers in the amount of R119 548 901. The benefit/value to consumers who approached our office increased by approximately R22 million from 2019 to 2020.

OSTI scored an overall customer experience rating of 76% out of a target of 80%. This rating increased by 1% from 2019.

Nature of short term complaints
The majority of these complaints, at 36%, related to motor vehicle disputes. This was followed by homeowners’/building disputes at 21%, commercial at 14%, and household contents at 5%. The balance of 24% is related to other types of cover and general policy queries.

The complaint trends in 2020 were influenced, in part, by the nationwide lockdown and government regulations. For instance, the number of motor vehicle-related complaints was 12% lower than in 2019. It was the lowest reported in the last five years. Commercial complaints increased by 5%, with the majority relating to business interruption claims.

At 73%, accident-related claims remained the highest number of complaints considered by OSTI in this category. Warranty and mechanical breakdown claims comprised 11%. Theft and hijack claims comprised 7%.

In 2020, 16% of the total number of motor vehicle disputes were resolved in favour of the insureds, and OSTI put R48 908 741 back into their pockets. OSTI considered a total of 2 100 homeowners’ insurance disputes in 2020, 15% more when compared to 2019. The primary cause for the complaints, at 47%, was the rejection of claims based on policy exclusions for damage caused by defective design, construction or workmanship, wear and tear, and lack of building maintenance. This cause for complaints increased by 17% in 2020 and continues to be the main basis for consumer dissatisfaction in homeowners’ insurance coverage.

Theft and burglary claims comprised 55% of complaints considered by OSTI under this category. This was a 17% decline compared to last year’s figure. Complaints relating to damage caused by power surges increased from 3% in 2018 to 6% in 2019. Last year 11% of household contents disputes related to power surge claims. This cause of damage will remain a concern for consumers during periods of load-shedding.

The total number of commercial complaints considered by OSTI in 2020 surged by 62% when compared to 2019. Motor vehicle complaints comprised 21%. This was a 12% decline when compared to 2019. Building complaints also declined from 23% in 2019 to 18% in 2020. In 2020, 22% of commercial insurance complaints related to business interruption claims. The majority of these, 15%, concerned COVID-19-related business interruption.

Sixteen percent of commercial insurance disputes were resolved in favour of the insureds’ complaint and OSTI recovered R38 909 691. These figures do not reflect the outcome of the business interruption complaints.

The remaining complaints relate to various types of insurance cover and products including personal accident, water loss, travel, all risks, mobile devices, legal expenses, hospital and medical gap cover. This category, overall, comprised 25% of the formal complaints considered by OSTI in 2020. Disputes relating to mobile device theft and accidental damage were the highest in this category, at 30%. COVID-19-related travel insurance disputes comprised 7% of all these disputes. Twenty nine percent of the total complaints in this category were resolved in favour of the insureds’ complaint and OSTI recovered R12 245 301.

Source – FA News