The 2022 Annual Report for the Ombudsman for both the Long-Term (OLTI) and the Short-term Insurance (OSTI) was released in May 2023.
The Office for the Long-Term Insurance:
The report reflects the findings of the insurer activities in relation to the complaints received by the Ombuds Office. For 2022, there were 7126 complaints received. Overall, the reported statistics for 2022 reflected lower numbers than what was reported for 2021. Click here for more information on the Long-Term Insurance Case Determinations.
The Office for the Short-Term Insurance:
The annual report shows that the Office for the Short-Term Insurance Ombud received 10 411 formal complaints for the 2022 period which was a decrease from 10 879 complaints in the previous year, 2021.
A closer look at the 10 411 complaints that were closed, shows that most of these complaints were in respect of motor vehicle claims (42.7%) followed by homeowners/building claims (23.3%), commercial claims (13.6%) and household content claims (5.9%), with the balance of complaints (14.5%) being non-claim related or related to other types of cover.
Analysis of the claims
Motor Vehicle Claims
A deeper analysis of Motor Vehicle claims reveals that 65.1% of these complaints were for accidental damage. Warranty and mechanical breakdown claims comprised 13.8%. Theft and hijack claims also comprised 6.7%. This trend remains consistent with previous years. The Report stated that the primary reason for the complaints under this category was claims rejected based on an exclusion in the policy.
Homeowners insurance claims
905 complaints were considered by the OSTI under homeowner’s insurance related to homeowners insurance claims. The primary cause of these complaints, at 44%, was the rejection of claims based on wear and tear, gradual deterioration, and lack of building maintenance as the proximate cause of the damage. The secondary cause for complaints related to rejections based on “no insured peril”.
Household content insurance claims
Theft and burglary claims amounted to 40% of complaints considered by OSTI under this category and remain the primary cause for complaints, as in the previous year. The secondary cause for complaints was the claims resulting from power surges, followed by accidental damage and acts of nature.
Commercial insurance claims
The majority of commercial complaints considered by OSTI related to the application of a policy exclusion, amounting to 195 complaints. The secondary cause for complaints was the quantum of the claim, which was in dispute, the criteria for the insured event not being met and, no insured peril.
‘Other’ & non-claim related policy complaints
The remaining complaints relate to various insurance products – including personal accident, water loss, travel insurance, all risks, mobile device cover, legal expenses, hospital, and medical gap cover. The main cause for the disputes as indicated by the office was the rejection of claims based on an exclusion in the policy. These amounted to 226 complaints with the majority of these complaints resulting from the “prevention of loss/due care” exclusion.
Based on the figures included in the report, it could be deduced that 91.1% of all the complaints closed had identifiable TCF outcomes. A further breakdown indicates that 50.54% of complaints, impacted TCF Outcome 1 in that the fair treatment of clients was not ensured. In a further 22.24% of the complaints, it was found that TCF Outcome 3 was impacted in that clients were subjected to unacceptable standards in terms of the services rendered to them.
We recommend that FSPs who deal in short-term insurance products take time to read the Ombud’s full report for insight into current market conduct risks. This can be used as the basis to review inherent risks which are present in the FSPs market segment, product provider selection or advice process and can be used to improve the FSPs own processes. As an example, by noting the frequent issues and complaints related to exclusionary clauses with the aim of enhancing the FSP’s process to clearly draw the client’s attention to important information (such as the exclusions) during the engagement and ensure that clients are appropriately and clearly informed.
Read the Insurance Ombud – Annual Report 2022 here.