The Office of the Ombudsman for Long-Term Insurance (Olti) received 11.8% fewer chargeable complaints in the first half of this year compared with the same period last year, when the number of complaints reached a record high in the wake of Covid-19, according to the office’s half-year statistics.
The office received 3 709 chargeable complaints in the six months to 30 June this year, compared with 4 205 in the same period last year. However, this was 30% higher than the number of such complaints (2 844) received in the first half of 2020.
“Chargeable complaints” are made up of:
- Mini cases, which are “simple” complaints that fall within the office’s jurisdiction, but which insurers can handle without the office’s involvement. If the matter is not resolved, the complainant can revert to the Olti.
- Transfers, which are complaints not previously seen by insurers and which the Olti refers to insurers to resolve directly with the complainant. If the complaint is not resolved, the complainant can ask the Olti to take up the matter as a “review”, which is then handled in the same way as a “full case”.
- Full cases, which are complaints that have already been seen by insurers and are handled by the office from inception to finalisation.
Complaints resolved wholly or partially in favour of complainants dropped by five percentage points, from 34% to 29%, which was also lower than in the first six months of 2020 (31%).
Despite this, the Olti recovered R29.4 million more for consumers in the first half of this year than it did in the same period last year, R107.3m versus R77.9m (2020: R90.3m). It said this was because there were a few more cases where larger amounts (between R1m and R5m, or more than R5m) were recovered, compared with the same period last year.
The table below shows the percentage of cases, by type of complaint, resolved wholly or partially in favour of the complainants.
The table below provides a breakdown of the nature of complaints (as a percentage of closed cases).
Ombudsman Judge Ron McLaren said the percentage of complaints related to policy lapses is still higher than in pre-Covid years as policyholders struggle to pay premiums under difficult economic circumstances and often cannot meet the requirements for reinstatement.
As the table below shows, funeral policies not only continue to give rise to most complaints, but the number of these complaints has increased.
Funeral benefits have always been the benefit category with the highest number of complaints. Death during the waiting period and disputes about the “true relationship” between the policyholder and life assured are the common causes of the complaints.
The Olti attributed the increase in complaints since 2020 to the rise in Covid-related deaths, which resulted in more funeral benefit claims. Some insurers struggled with the increase in volumes, particularly when staff were working from home, leading to complaints about poor service.
More recently, there have been complaints about the increases applied to funeral policies.
There was a one-percentage point increase in complaints about disability benefits.
Complaints relating to the other types of benefits have either declined or, in the case of credit life dread disease benefits, remained the same compared to the first six months of 2021.
Some complainants are becoming demanding
The office has noticed a trend of some complainants becoming increasingly persistent and demanding.
“Even after a final ruling has been issued and an application for appeal has been dealt with, some complainants persist with pursuing their complaint, often involving mainstream and social media,” Judge McLaren said.
“Some complainants send multiple communications in a short space of time and demand that their matter receives priority attention or that a specific adjudicator handles it. This impacts on our productivity and has resulted in several complainants being cautioned about our Rule 3.3.2 and Policy on Unreasonable Complainant Behaviour.”
The number of written requests by consumers for assistance from the Olti increased by 7.6%, from 8 300 to 8 933, which is well up on the 5 606 received in 2020.
