Best & Worst Insurance Companies In South Africa Exposed
2017/2018 surely wasn’t the easiest year for policyholders or insurance companies. Mother Nature brought us some dramatic challenges in South Africa, the unexpected tornadoes in the Vaal, flash floods in KZN and Gauteng, fires that destroyed much of Knysna and the harsh drought in the Western Cape. It has been a tough year indeed with 61% of complaints under homeowners insurance relating to storm damage and other acts of Mother Nature.
As policyholders, we have had our fair share of trouble but what’s imperative is how our insurance companies helped us deal with these troubles… or did they add to the trouble.
Dear Ombudsman, we appreciate you!
So finally the Ombudsman for Short-Term Insurance (OSTI) has released their annual report on 2017’s happenings. Quick shout out to the Ombudsman and the work their offices are doing for recovering R87.1 million for consumers. The question I have is why is the Ombudsman having to get involved in so many cases? Aren’t we meant to trust that our insurers are going to act in the best interest of their consumers? Is this an unrealistic expectation?
Quick DID YOU KNOW who the Ombudsman is?
The Ombudsman was established to provide independent mediation services for consumers of insurance (policyholders) with the aim to mediate for the consumers that dispute their insurance providers decisions.
This is free (yip, something in South Africa is free!) for consumers but the insurance companies pay a per-complaint-fee. To save you more money we can help you compare car insurance companies side-by-side, check if your car insurance premium could be less here:
Some Highlights From The Ombudsman Report
In 2017 there were 9,962 formal complaints closed by the Ombudsman, one of the most frightening things, 49,3% of these complaints had to do with Car Insurance providers. “This figure mainly comprised claims rejected on the grounds that the insured was driving under the influence of alcohol,” said Ayanda Mazwi, senior assistant Ombudsman.
Homeowners claims followed at 20.4%, commercial claims contributing 7.9% and household content claims totaling 6.2% of the formal complaints actioned.
This is why it’s paramount to choose the most reliable car insurance company and not merely make decisions based only on premium, we are all pro-savings (who couldn’t use that extra cash) but no-one wants to be paying a premium for 12 months and when it comes down to claims stage it was all for nothing. If you want to compare car insurance providers on more than just price, check out our Provider Reviews where consumers review their provider and give them a score!
The Insurance Company With The Most Complaints Award Goes To…
It’s important to note that bigger companies generally will draw a larger number of complaints. Because the OSTI wants to give a better picture of how the insurance companies compare they have added different metrics such as number of complaints the insurance company received per 1000 claims received by the insurers.
Another golden nugget of knowledge, the overturn rate explained. When a decision is overturned it means that the decision was changed by the insurer due to the complaint that was handled by the ombud, generally with some benefit to the insured.
A high overturn rate usually indicates that the insurance companies aren’t treating the consumers fairly.
The major insurance companies with the most complaints:
- Absa Insurance – 778 complaints, 21.7% overturn rate
- MiWay Insurance – 608 complaints, 8.6% overturn rate
- Old Mutual Insure – 608 complaints, 26.0% overturn rate
- Hollard Insurance – 601 complaints, 29.5% overturn rate
- Santam – 579 complaints, 21.6% overturn rate
- Standard Insurance – 499 complaints, 13.2% overturn rate
- Guardrisk Insurance – 480 complaints, 44.6% overturn rate
- OUTsurance – 366 complaints, 4.9% overturn rate
- King Price– 312 complaints, 9.81% overturn rate
- Santam Structured Insurance – 282 complaints, 15.61% overturn rate
We helped Taryn compare multiple car insurance providers, get your quick quote nowAbsa Insurance has received the most complaints in 2017, runner-up not too far behind is MiWay and Old Mutual Insure with 608 complaints each and in 3rd place here comes Hollard Insurance with 601 complaints.
Have a look below if you want to see how all short-term insurers ranked in the complaints department:
Who Was Rated The Best Short-term Insurance Company?
Consulta conducted a report on South African Customer Satisfaction Index (SAcsi) for Short-Term Insurers and the results are in… Santam has been rated the as the most satisfactory short-term insurance company in South Africa by consumers.
Santam Insurance has an overall SAcsi score of 81.3 which is nicely above the average of 75.8. Santam has managed to improve their score consistently over the past 3 years. In 2016, Santam scored 80.00 overtaking the industry leader at the time, Outsurance.
From 2016 to 2017 Santam remained the most satisfactory insurance company increasing from 80.00 to 81.3, in second place was Mutual & Federal with 77.7 points, thirdly Outsurance with 77.3 points, followed by Auto & General and Hollard.
Mutual & Federal comes in as 2nd best insurance company but has the 2nd highest complaints at the Ombudsman. Santam is rated the most satisfactory insurance company in South Africa and has 579 complaints at the Ombudsman which is 5th highest. Clearly, there is no perfect insurance company, it’s all about finding the middle ground of what’s acceptable to you.
“At the heart of it, customer satisfaction in short-term insurance is driven by the provider’s ability and perceived willingness to meet the customer’s needs when a claim is made,” said Consulta CEO, professor Adré Schreuder.
“Customers want insurance products that work, not gimmicks, and they are willing to pay more for a reliable, value-for-money offering.”
The factors that remain important to consumers over the years are the following:
- Consumers place ample value on being able to trust the brand,
- How simple and easy it is signing up, claiming and just being with the insurer over long periods of time,
- How available the insurer is pertaining to customer service,
- How well the insurance company communicates with the consumer, lack of communication is a major cause of “insurance-heart-break”
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