South Africa’s worst insurers, measured by client complaints

By Helena Wasserman for Business Insider SA

Car-related claims represent almost half of all disputes handled by the Ombudsman for Short-Term Insurance.

Absa Insurance and King Price rated among the most complained-about insurers in 2018, according to the Ombudsman for Short-Term Insurance’s annual report.

OUTsurance and Santam had the fewest complaints referred to the ombud.

In only 6% of OUTsurance complaints did the ombud find in favour of the client – compared to 24% in the case of Hollard complaints.

When it comes to claim payouts, King Price and Absa are among the local insurers who have the unhappiest clients.

That’s according to new numbers released by the Ombudsman for Short-Term Insurance. The ombud’s annual report for 2018 shows that almost 800 complaints (9% of all complaints in the industry) were received from Absa Insurance clients. However, the ombud only found in favour of the Absa’s insurance clients in 18% of the cases.

Here are some of the other big insurers that had high complaint rates (measured by the number of complaints received by the ombud, compared to the total number of claims submitted to the specific insurer).

King Price: 5.3 complaints per 1,000 claims
The ombud ruled in favour of unhappy clients: 17% of the disputes

Oakhurst: 5.7 complaints per 1,000 claims
Ruling in favour of unhappy clients: 15% of the disputes

Standard: 4.8 complaints per 1,000 claims
Ruling in favour of unhappy clients: 14% of the disputes

MiWay: 4.8 complaints per 1,000 claims
Ruling in favour of unhappy clients: 11% of the disputes

Nedgroup: 4.5 complaints per 1,000 claims
Ruling in favour of unhappy clients: 23% of the disputes

Budget: 4.0 complaints per 1,000 claims
Ruling in favour of unhappy clients: 11% of the disputes

Old Mutual: 3.7 complaints per 1,000 claims
Ruling in favour of unhappy clients: 19% of the disputes

Dial Direct: 3.3 complaints per 1,000 claims
Ruling in favour of unhappy clients: 9% of the disputes

First for Women: 2.8 complaints per 1,000 claims
Ruling in favour of unhappy clients: 15% of the disputes

The winners:
OUTSurance delivered an impressive performance, with only 1.3 complaints per 1,000 claims – and in only 6% of disputes did the ombud rule in the client’s favour.
Other insurers with low complaint rates included:

Santam: 1.5 complaints per 1,000 claims
Ruling in favour of unhappy clients: 17% of the disputes

Discovery: 1.8 complaints per 1,000 claims
Ruling in favour of unhappy clients: 14% of the disputes

Auto & General: 1.8 complaints per 1,000 claims
Ruling in favour of unhappy clients: 13% of the disputes

Hollard also had a relative low dispute rate (1.9 per 1,000 claims) – but in a whopping 24% of cases, the ombud ruled in favour of its clients.

The report shows that more than R87 million was paid out to insurance clients in South Africa following complaints. Almost 9 500 complaints were closed, and on average it took 104 days to settle the complaints.

Motor vehicle insurance represented 48% of the total number of finalised complaints. But only 18% of motor vehicle insurance disputes were resolved in favour of the client.

This was even lower for household content insurance disputes (15%) and homeowner’s insurance disputes (12%).

In more than two-thirds of finalised complaints, consumers complained about the insurer’s decision on a claim. Most complaints related to the rejection of a claim on the basis of an exclusion or warranty in the policy terms and conditions.