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Insurance Ombudsman receives record high number of complaints

Accident-related complaints declined from 73% in 2020 to 65% in 2021, but they remained the highest type of complaint. Picture: Armand Hough/African News Agency (ANA)

Accident-related complaints declined from 73% in 2020 to 65% in 2021, but they remained the highest type of complaint. Picture: Armand Hough/African News Agency (ANA)

Published May 19, 2022

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Cape Town - The Ombudsman for Long-term (life) Insurance (Olti) and the Ombudsman for Short-term (non-life) Insurance (Osti) together put almost R400 million back in the hands of consumers who complained in the past financial year.

In their joint 2021 Annual Report, the Olti said that R200 million was recovered for complainants in lump sums, and an additional R948 592 was awarded to complainants as compensation for poor service, while the Osti’s benefit for consumers was R197 million.

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Deputy Ombudsman for Long-term Insurance Denise Gabriels said Olti made history in 2021 by recording more than 17 000 cases related to insurance disputes – a 22% increase from the previous year, the most complaints in its history.

Gabriels said that the increase in complaints could largely be ascribed to the effects of the Covid-19 pandemic, as insurers had reported widely about the increased number of claims.

“Combined with an inordinate rise in the number of claims, especially funeral and credit insurance claims, this gave rise to many service-related complaints.”

Osti chief executive Edite Teixeira-Mckinon said that during 2021, Osti finalised a total of 10,879 formal complaints while registering 9,797 new complaints.

Teixeira-Mckinon said accident-related complaints declined from 73% in 2020 to 65% in 2021, but they remained the highest type of complaint.

She said that in 2020, the office reported the lowest number in this category, with a 12% decline when compared to 2019 and that this was attributed, in part, to the nationwide lockdown.

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She said complaints relating to damage caused by power surges as a result of load shedding increased from 3% in 2018 to 16% in 2021.

“In 2020, 11% of household content disputes were related to power surge claims. With the country continuously dealing with load shedding and power outages, Osti recommends that consumers review their policy documents to ensure that they enjoy cover for damage caused by a power surge.”

She said that some household contents insurance policies do not include this cover, whilst other policies may only cover power surge damage for an additional premium if it is requested.

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