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Short-term insurance ombud recovers R87m for consumers

Consumer complaint turnaround times have improved without sacrificing quality outcomes, says deputy ombudsman.

NOMPU SIZIBA: The ombudsman for short-term insurance, also known as Osti, is the body that’s responsible for providing consumers with a fair and transparent dispute-resolution process in the event of short-term insurance disputes. Today [Tuesday] it published its annual report on operations, which speaks to its case load, how they are resolved and the extent of the resolution.

I’m joined on the line by Edite Teixeira-McKinon. She’s the deputy ombudsman at the short-term insurance ombud. Thanks very much for joining us, Edite. You indicate that you had some 9 474 complaints in 2018, and you were able to recover some R87 million on behalf of consumers who were insured. When you break down the number of complaints, what proportion of cases were resolved to both consumer and insurer satisfaction?

EDITE TEIXEIRA-McKINON: Good evening, and good evening to your listeners. In motor-vehicle insurance complaints, which constitute 48% of all complaints received, we managed to resolve in favour or find some benefit for the consumer in 18% of those cases. In the miscellaneous category – which includes travel insurance, welfare insurance, medical shortfall insurance – we managed to find in favour of the consumer in 29% of those matters. So it depends on the category of complaints that we are dealing with.

NOMPU SIZIBA: From the stats that you have just churned out there, in most instances you felt that the insurance companies had pretty much followed due process and hadn’t done anything wrong. So in 70 or 80% of the instances the insurer has won, so to speak.

EDITE TEIXEIRA-McKINON: This is correct. But despite what we call the low overturn rate, we still managed to recover slightly more than the previous year’s figures. We recovered just over R87 million for consumers. So obviously the amounts that we are recovering are higher than in the previous year.

NOMPU SIZIBA: Interestingly, you received some 88 000 calls at your call centre. Are those usually just query calls, some of which may perhaps become part of the 9 000-odd complaints that you did receive? And do you have the capacity to deal with all this?

EDITE TEIXEIRA-McKINON: We do indeed. And, as you correctly point out, a lot of these are queries which turn into complaints, or there are complaints that belong to another ombudsman. Often, because of the titles, short-term insurance and long-term insurance, a lot of consumers don’t understand the difference, so we get a lot of complaints that perhaps belong in a different jurisdiction, at a different ombudsman. But we do have the capacity, yes.

NOMPU SIZIBA: You indicate that on average the claims that the Osti deals with were dealt with within about 104 days. That’s basically about four months. I’m trying to imagine – if I’ve got an issue with my car and I need a return, that’s quite long, but it’s still a better number than what you were averaging in 2017.

EDITE TEIXEIRA-McKINON: Correct. In 2017 our turnaround time was 131 days. We’ve got to be careful that we don’t drive a low turnaround time at the cost of quality outcomes. These issues are not very simple, they are not always simple to resolve, and they require investigation before a proper decision is made. So we cannot sacrifice quality outcomes for low overturn or turnover rates.

NOMPU SIZIBA: Fair enough. Without getting too technical, Edite, for one reason or another Osti now reports its insurance data differently. Just tell us what’s different, and why there was a need to do that. And ultimately, I suppose, the most important thing, as you’ve mentioned, is that whichever way you report the information you remain a body that seeks to do justice for the consumer.

EDITE TEIXEIRA-McKINON: Correct. We found insurers had often felt aggrieved by the way that we reported the overturn rate. This is where we have found some things for the consumer, whether it’s overturning the insurer’s decision completely, or just in part. And so we decided that, in the interests of transparency and also to convey a proper image of these insurers to the consumers and to the world at large, we would distinguish between those outcomes where we have found for the consumer that had been arrived through a conciliated process, a negotiated process, and those where we’ve actually had to pull out and made a recommendation and enforced a decision. And you will note from the statistics on the insurers that the majority of them actually agreed to a lot of our informal recommendations without having to go the route of a formal recommendation or a ruling. It was very encouraging for consumers and for our office.

NOMPU SIZIBA: What is Osti doing to improve its customer-centric focus, and how are you using information technology to do this?

EDITE TEIXEIRA-McKINON: We’ve very broadly enhanced our website, enabling complainants to lodge complaints online, and also to send via our website “please call me” messages. We have increased our call-centre capacity and we are able to call these complainants. And we are able to lodge complaints as well to assist them if they just don’t want to go the online route and want that personal contact – which has seen an increase in the number of complaints registered in our office.

NOMPU SIZIBA: Edite, we will leave it there. Thank you so much for your time.

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