Then the long-term insurance ombud, Judge Brian Galgut, made similar disclosures.
“It is in line with the growing trend internationally and locally for ombudsman schemes to publish such information,” said Judge Galgut.
That’s because it gives consumers insight into how competing insurers handle claims and service policyholders, untouched by marketing spin. Long-term insurance is essentially life insurance, and includes disability and retrenchment policies.
The information, published on the ombud’s website at the weekend, reveals the number of complaints received for each insurer; the number of cases considered and closed; and the number resolved in favour of the complainant or the insurer.
The numbers are published without any interpretation; that’s for insurers, the media and consumer organisations to provide, said Judge Galgut.
“Such interpretation and comment by us would not be consistent with our role in impartial dispute resolution. The only contextualising is the individual insurers’ complaints as a percentage of the total complaints received.”
And as context goes, on its own that percentage could be a little misleading, as clearly the more policyholders an insurer has, the more claims it handles, so more complaints to the ombud will result.
The “overturn” rate is significant – that’s the percentage of finalised cases that were resolved totally or partially in favour of the consumer.
The overall average last year was 37.4 percent of cases in which the ombud’s decision resulted in some benefit to the consumer. Complaints weren’t just about repudiated claims – more than a quarter of complainants were unhappy about the service they received.
If an insurer’s percentage of cases resolved in favour of the consumer is significantly higher than the average, it’s an indication that in a relatively large number of cases, the insurer’s decision to reject claims was not entirely justified or fair – or that the insurer is generally guilty of providing poor service, or a combination of both.
And the reverse is true. The insurers will want their “resolved with benefit to consumer” percentage to be lower, not higher, than the 37.4 percent average.
The ombud’s website provides a breakdown of the nature and number of complaints for each insurer, which makes for fascinating reading.
The insurer most glaringly on the wrong side of the average “consumer benefit” figure was Real People Assurance Company. Of the 19 cases finalised by the ombud last year, 63.2 percent went consumers’ way.
In the case of Workers Life, the “resolved to the benefit of consumer” rate was 58.1 percent (of 31 finalised cases); Nestlife Assurance’s was 59.3 percent (of 27 cases); New Era Life Insurance’s was 55.6 percent (of nine cases); Professional Provident Society’s was 55.2 percent (of 29 cases); Union Life’s was 53.8 percent (of 26 cases); AIG Life SA’s was 50.6 percent (of 393 cases); and Prosperity Insurance’s was 44.6 percent (of 112 cases).
Old Mutual policyholders sent the most complaints to the ombud’s office last year – 765. A total of 257 cases were finalised, 24.1 percent of which with some benefit to the consumer – way below the average of 37.4 percent.
There were a total of 644 complaints about the Liberty Group for the year, and 574 cases finalised. Of those, 38.3percent were resolved with some benefit to the consumer.
The third biggest number of complaints came from AIG Life SA policyholders – 520. Some 393 cases were finalised, more than half (50.6 percent) with some benefit to the consumer.
- Judge Ronald McLaren took over as the ombud for long-term insurance on June 1.
Other insurers’ stats
Hollard: 505 complaints, 449 finalised, 43.7 percent resolved in favour of consumers.
Metropolitan Life: 499 complaints, 400 finalised, 39.5 percent of cases resolved in favour of consumers.
Momentum Group: 449 complaints, 254 finalised, 30.3 percent of cases in favour of consumers.
Sanlam: 331 complaints, 133 finalised, 14.3 percent of cases resolved in favour of consumers.
Clientele Life Assurance: 299 complaints, 297 finalised, 33.3 percent of cases resolved in favour of consumers.
NedGroup Life Assurance: 161 complaints, 126 finalised, 23 percent of cases resolved in favour of consumers.
Discovery Life: 132 complaints, 102 finalised, 28.4 percent of cases resolved in favour of consumers.
Channel Life: 151 complaints, 133 finalised, 48.1 percent of cases resolved in favour of consumers.
Regent Life Assurance: 109 complaints, 91 finalised, 27.5 percent of cases resolved in favour of consumers.
Outsurance Life Insurance: 22 complaints, 19 finalised, 31.6 percent of cases resolved in favour of consumers.