• The Ombudsman for Long-term Insurance has received a record number of complaints in the last year.
  • The ombud found in favour of clients in almost a third of cases.
  • Among the biggest insurers, Hollard had the worst record when measured in terms of rulings against it: more than 44% of rulings were in favour of clients.
  • Sanlam's rate was among the best. 
  • The ombud says there are still some cases where insurers are not embracing ubuntu.
  • For more, go to Business Insider SA.

The Ombudsman for Long-term Insurance received a record number of complaints last year, with almost 12,000 written requests for assistance.

Almost half of the complaints fell within its jurisdiction, which was an increase of 10% compared to the previous year, says ombudsman Ron McLaren. 

Read: These are South Africa's worst insurers, measured by client complaints

There were more complaints about funeral benefits than any other type of benefit:

Source: The Ombudsman for Long-term Insurance

Some 91% of complaints were finalised within six months. Almost a third of the cases were resolved partially or wholly in favour of clients, with R185.8 million paid out to clients.

This is how the major insurers stacked up, measured in terms of the percentage of findings against them:

Hollard (868 complaints) - 44.2% of rulings in favour of clients

Liberty Group (606 complaints) - 35.2% of rulings in favour of clients

MMI (328 complaints) - 34.1% of rulings in favour of clients

Assupol (223 complaints) - 34.0% of rulings in favour of clients

Metropolitan Life (410 complaints) - 32.4% of rulings in favour of clients

Clientèle (231 complaints) - 31.9% of rulings in favour of clients

Absa Life (182 complaints) - 29.4% of rulings in favour of clients

Discovery Life (216 complaints) - 28.0% of rulings in favour of clients

AVBOB (122 complaints) - 27.4% of rulings in favour of clients

Old Mutual Life (855 complaints) - 24.8% of rulings in favour of clients

Sanlam Developing Markets [Sanlam entry level products] (220 complaints) - 21.9% of rulings in favour of clients

PPS (36 complaints) - 20.7% of rulings in favour of clients

Sanlam Life Insurance Limited (276 complaints) - 16.3% of rulings in favour of clients

Source: The Ombudsman for Long-term Insurance
Source: The Ombudsman for Long-term Insurance
Source: The Ombudsman for Long-term Insurance

Some 160 complainants who complained about poor service received compensation of more than R630,000.

“We note an increasing awareness on the part of complainants to ask for compensation for poor service, although the requests are not usually articulated so explicitly,” McLaren said.

“A common misconception by complainants is that the amount of compensation should equal the policy benefit in question. Complainants also often express the misguided wish that the insurer should be punished by the compensation award.”

Not enough ubuntu

The ombud noted that while insurers are required to comply with the industry's Treating Customers Fairly (TCF) principles – and the concept of ubuntu, which has been confirmed as part of contract law following a Constitutional Court judgement in 2011 - “some insurers demonstrate the opposite”.

In one such case involving a funeral claim for a stillborn baby the insurer had unfairly refused a R1,000 payment, until the ombud intervened.

Sanlam was also instructed to pay a funeral claim on the death of a second cousin who had been described as a cousin by the complainant.

The term "cousin" includes second cousins in certain black languages and cultures, the ombud said.

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