Insurance ombud names and shames worst performing life insurers for 2019
Most of the complaints received by the ombudsman for long-term insurance (OLTI) last year were about funeral polices - and more than half of those concerned declined claims.
In releasing its annual report for 2019, the ombud’s office revealed that 3Sixty Life was the worst-performing insurer of the year in terms of the service it provided.
This was "reflected in the number of second reminders - 120 - the office had to send to the insurer because of a lack of response to complaints".
On its website, 3Sixty Life, formerly Union Life, prominently displays its promise: “No one financially left behind.”
Funeral cover complaints made up 42% of all complaints received by the office last year, slightly more than the previous year - with 52.5% being about declined claims and almost 31% about poor service.
The ombudsman, judge Ron McLaren, said the number of lives now covered for funeral benefits - and the fact that funeral benefits provide cover for "an urgent need" and claimants were "therefore understandably quick to complain" - contributed to the growing number of funeral cover complaints.
“The fact that the percentage of cases resolved in favour of complainants in funeral complaints was 42%, as compared to the 34.12% overall percentage, points to this,” he said.
“Unlike other forms of life insurance, the claimants in funeral complaints may not have intermediaries that can intercede on their behalf, and therefore the ombudsman is the only form of recourse available.”
The “one unusual feature” of the office’s 2019 operations was the number of final determinations against insurers - nine - which was a new record, McLaren said.
Final determinations only happen when the insurer in question digs in its heels and refuses to accept the ombud’s ruling. If the resulting determination goes against the insurer, the determination is made public, and the insurer is named.
The insurers thus named and shamed in 2019 were Momentum Life, Sanlam Life, Sanlam Developing Markets (in two cases), Clientèle Assurance, Safrican Insurance, Nedgroup Life, Centriq Life and BrightRock Life.
In the balance of cases resolved wholly or partially in favour of complainants, 71 provisional determinations were accepted by insurers. In 1133 cases, insurers settled the cases without the need for a determination.
McLaren said the Covid-19 crisis would no doubt impact on the office of the ombudsman for Long-term Insurance but it was too early to predict what the eventual impact would be “and whether it will have a marked effect on the numbers and trends seen in the past.”
The OLTI annual report included the following office statistics for 2019:
- 11,915 written requests for assistance were received, of which 6,107 were chargeable complaints;
- 3,558 full cases were finalised and 34.12% of these were resolved wholly or partially in favour of complainants;
- more than R200m was recovered for complainants in the form of lump sums;
- R874,286 was awarded to complainants as compensation for poor service by insurers in 190 complaints;
- 91% of complaints were finalised within six months; and
- insurers were charged a handling fee of R4,086 for a standard case.