There has been a record number of complaints about life and funeral policies – here's how the insurers stack up
- 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.
There were more complaints about funeral benefits than any other type of benefit:
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
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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