'We are truly, truly sorry': Old Mutual
By the time Sifiso Mtshali’s relatives had dumped his body at Old Mutual’s KwaDukuza offices last Friday afternoon, the insurer had already paid the funeral policy.
That’s according to Old Mutual.
“We have payment runs at set times,” Tabby Tsengiwe, Old Mutual’s chief communications officer, told TimesLIVE.
“That funeral policy payment went through to the beneficiary’s Capitec account, for urgent clearing, before the family arrived with the body, but the SMS only reflected on her phone shortly afterwards,” she said.
“That made them believe that we only paid because they arrived at the branch with the body, which is unfortunate.”
The two women who were filmed carrying Mtshali’s body into that office on Friday were his niece, Thandaza Mtshali, and aunt, Ntombenhle Mhlongo.
The former had lodged a claim on her funeral policy with Old Mutual on the afternoon of November 11, and was told she’d have the money within 48 hours. That is Old Mutual’s standard promise to funeral policy claimants.
A video of a frustrated family arriving at a KwaZulu-Natal Old Mutual branch with the “body” of a deceased loved one went viral on November 19 2019. The family was protesting the finance company's delay in honouring a funeral policy.
Many get their money within eight hours, Tsengiwe said, thanks to the insurer’s technological advancements, including the use of robotics. And 99% of the 18,000 funeral policy claims processed, on average, every month, were settled within the promised 48 hours.
But for some reason — Tsengiwe couldn’t say — the claim for the cover of Mtshali’s funeral was escalated to head office for “assessment”.
On Tuesday, Mtshali, his niece, was advised of this by Old Mutual via SMS, with no indication of how long that process would take.
Things reached boiling point when, Mtshali alleged, a staff member at that Old Mutual office told her on Thursday that she should borrow money to pay for the funeral.
The family is poverty stricken, the funeral policy claim having been paid from a child grant.
“I saw fit to take the body to them while they were doing their assessment, because that could have taken months,” Mtshali told TimesLIVE. “I thought it best for them to figure out where to put the body.”
The issue was not about Old Mutual paying or not paying, Tsengiwe said. “It was the delay, which should not have happened.
“I can only imagine the level of desperation that bereaved family must have felt to resort to that,” Tsengiwe said.
“Our reach-out to them on Friday and again today [Wednesday] was to apologise and ask what more we can do.
“We are truly, truly sorry, and we have to look at our systems.
“Some tough learnings have come from this incident.
“We have to do our security checks, but the consequences of delaying payment are not good.”
Funeral policy-related complaints make up the biggest category of complaints received by the Long-Term Insurance Ombudsman — and they are growing every year.
Last year, they made up 41% of complaints, up from 37% in 2017 and 35% in 2016.
According to Caroline da Silva, regulatory strategy executive at the Financial Sector Conduct Authority (FSCA), in light of this case, the subcommittee set up last year to review practices in the underwriting and payment of claims would be expanded to include the processing of funeral policies.
“It’s abhorrent that a customer could feel so desperate that they go to those lengths,” she said.
But she warned people against responding to the Old Mutual case by cancelling their policies with the company.
“I’ve seen people tweeting proof that they have cancelled their policies, and that emotional reaction really worries me,” she said.
“Vote with your feet if you want to, but know that it will most likely have quite a big, negative impact on your life or investment policy.
“If you have developed a health condition since you took out the policy, for example, a new policy will come with exclusions and a higher premium,” she said.
Da Silva urged people to report insurers which were giving them bad service to the FSCA.