2015 Ombudsman report review SA’s short-term insurers

This overview of the Ombudsman’s report is sponsored by Outsurance

The Ombudsman for Short-Term Insurance (OSTI) has released the annual report for the 2015 calendar year. The Office of the Ombudsman provides consumers with an independent dispute resolution mechanism should they feel that they have been unfairly treated by their insurer.

(Outsurance analysis of the 2015 OSTI Annual Report)

It is important to note that the office of the Ombudsman has “limited jurisdiction over commercial lines policies and, in any event, has jurisdiction for personal lines business only up to R2 million, save for home owners claims where the jurisdictional limit is R4 million”. As such the statistics provided in the report focus only on personal lines claims (statistics provided by the Financial Services Board) and personal lines complaints received by the Ombudsman.

Clients may only make use of OSTI once all attempts to resolve their claim with the insurance company have failed.

During 2015, Osti received a total of 9 784 complaints. This is slightly down from 10 253 complaints lodged in 2014. Most complaints related to short term vehicle insurance.

The Short-term Insurance Ombudsman says the decrease in complaints is due to success of campaigns like the Treating Customers Fairly initiative that is changing the way insurers approach claims resolution.

Of the 10 insurers assessed, Zurich had the lowest number of complaints (1.1) received per 1,000 claims. Outsurance and Hollard had the second lowest rate at 1.8 complaints for every 1000 received.

When looking at the overturn rate (i.e. the number of times an insurer’s decision is overturned by the Ombudsman) Outsurance had 13% of complaints overturned, whilst MiWay had 13.8% and Alexander Forbes came in next at 14% against an industry average of 27%.

The Ombudsman noted that he had not needed to make any Final Ruling against any insurer during the year under review. A Final Ruling is made when the Ombudsman’s recommendation to an insurer is not acted to his satisfaction.

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