The Office of the Ombudsman for Long-Term Insurers (OLTI) has published its annual report for 2021, which shows which life insurers and other long-term insurers have caused the most complaints from insurers in the last year.

During the 2021 review period, the ombudsman received 17,379 requests for assistance, which is 22% more than the 14,198 requests he received in 2020, and this is the largest number of requests for assistance of all time.

The ombudsman said that 8,163 inquiries had turned into payable complaints, which were accepted by the office for further consideration – 1407 more inquiries than in 2020.

“Kovid-19 has had a significant impact on the number of insurance claims and the administration of claims by insurers, and this is also reflected in the increase in the number of complaints,” the ombudsman said. More than 6,000 other cases were not applied to OLTI and were transferred to other Ombudsman services.

Complaints about funerals and lifelong loan payments increased the most during this period.

“This is not surprising given the increase in deaths in late 2020 and 2021 due to Covid-19, as well as the increase in reductions and loss of income due to Covid-19,” the ombudsman said. “Perhaps surprisingly, the number of complaints about disability and health benefits is decreasing.”

A total of 3,899 cases were completed in 2021, 34% of which were dismissed with full or partial benefit in favor of the applicant. If we add the transferred cases settled in favor of the complainants, this percentage increases to 41.21%.

The ombudsman said more than 200 million rupees had been collected from complaints in the form of lump sums. This figure does not reflect the value of all benefits granted to the complainants, such as regular income or installment payments, annuities, policy renewals, etc.

The amount of compensation awarded to the complainants for poor service to the insurer was Rs 950,000 on 195 complaints.

Insurers complained the most about LT

Unlike the Ombudsman for Short-Term Insurers (OSTI), OLTI does not include indicators such as the ratio of complaints to customers to give a better idea of ​​how complaints fit into the broader picture of the long-term insurance market.

“Although there are a number of published reports that reflect market share in the long-term insurance industry, there is no single generally accepted measure for this, and therefore it is not reflected in the published data,” the ombudsman said.

“Another reason for not including market share is that the office lacks basic data that could be used to determine market share, and this makes it impossible for the office to verify their accuracy. The only context is the complaints of individual insurers, expressed as a percentage of the total number of complaints received, ”the statement reads.

Instead of focusing on the relationship between complaints and customers, OLTI includes information on the percentage of assessed complaints that are ultimately accepted with full or partial benefit to complainants. However, this measure can be deceptive.

A large insurer with more customers will invariably attract more complaints than a smaller firm, but smaller insurers with multiple complaints may end up seeing worse levels of turnover simply because of the proportions they work with.

For example:

  • A major insurer with 100 complaints, where 50 of these complaints have been canceled in favor of customers, will give a 50% recall rate.
  • A small insurer with two complaints, if only one of them is canceled in favor of the client, will also give 50%, which gives the impression that the service levels of the two insurers are the same.

A fairer indicator of the insurers with the most complaints would be to look at the turnover rates among the insurers that also attract the most complaints overall.

Of the 51 long-term life insurance policies covered by OLTI, only 21 received more than 100 complaints. The table below lists these 21 insurers by the number of cases resolved in favor of the complainants, which gives a better idea of ​​the turnover ratios among the insurers who complain the most.

However, for completeness, all information is presented here.

51 long-term life insurance, listed on the total number of complaints received

51 long-term life insurance, listed as a percentage of complaints in favor of complainants

Read: South African Insurers Most Complained

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