best and worst insurance companies South Africa

2020 has undoubtedly been the strangest, scariest year that we have experienced as the unexpected black swan event, the Covid-19 pandemic hit our shores. Luckily, we have some ‘normal’ results to look at when it comes to the short-term insurance (OSTI) report that was released this year as the ombudsman’s report is based on 2019 results.

We won’t be able to say the same for next year’s short-term ombudsman report. The figures will be very different to say the least. We say this because car insurance complaints always add up to the biggest chunk of the report but since so few cars have been on the road this year, fewer accidents were caused which means fewer car insurance claims and fewer ombudsman complaints to deal with. Have you been wondering if you can pay less for car insurance? Try this 5-minute online quick quote and see premiums from over 6 different insurance companies:

“In April we saw a decline in complaints, and that was predominantly because 49% of our complaints are from motor accidents and motor vehicle claims.”

Said OSTI CEO Edite Teixeira-Mckinon

R94.9m was recovered in favor of consumers by the Ombudsman in 2019

An incredible amount of money that we thank the Ombudsman for recovering on behalf of consumers.

To make decisions on short-term insurance in 2020 and halfway through 2021 we will look at the OSTI report of 2019. No one wants to sit and read the whole Short-term Insurance Ombudsman report. That’s why we have decided to compile the highlights for you.

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The OSTI received 10, 367 complaints in 2019 and managed to close 9167 of them. This translated to R94.9m being recovered compared to R87m from the previous year. Motor vehicle insurance made up 49% of the complaints for 2019, followed by homeowner’s insurance which amounted to 20%, commercial insurance complaints of 7.9%, and household content added up to 6% of total complaints.

The OSTI has a variable they hold themselves accountable for which is, the time it took for insurance cases to be closed. In 2019 the OSTI closed 56% of cases within 4 months which is actually down from the 65% of 2018. The Ombud had an average turnaround time of 117 days compared to 104 days of the previous year. Seems that the OSTI’s numbers are slightly worse in 2019 than in 2018. Their number of complaints was higher, but their revenue and profits were up from year to year.

The OSTI recorded revenue of R45.2m (up from 2018’s R38.1m) with operating costs of R42.8m. “Going to court is expensive and combative, so our office offers a safe space for the resolution of disputes. In addition, our decisions don’t set any precedents and each matter is decided on its own merits.”. Teixeira-Mckinon stated that there are valid concerns of cancellations for insurance products during the lockdown this year.

Most Complained About Short-term Insurance Companies

It’s difficult to determine who the best and worst insurance companies in South Africa are, there are many factors to consider. We have looked at 2 key factors for this report:

  1. Number of Complaints received by OSTI per thousand Claims received by Insurer
  2. Share of matters resolved through enforcement of OSTI

According to the 2019 OSTI Report, these were the MOST COMPLAINED ABOUT Short-Term Insurance Companies:

Name of Insurer Number of Complaints received by OSTI per thousand Claims received by Insurer Share of matters resolved through enforcement of OSTI
New National 10,2 2,09%
Dial Direct 5,6 2,11%
Oakhurst 5,1 2,16%
Budget 4,7 1,52%
Absa 4,5 1,48%
King Price 4,4 1,73%
First for Women 3,8 2,11%
MiWay 3,6 1,60%

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As you can see the difference between the most complained about insurance company and the second most complained about insurance is almost double. New National received 10.2/1000 complaints and Dial Direct received 5.6/1000 complaints.  The 3rd most complained about insurance company was Oakhurst. The top 3 most complained about insurance companies also had an enforcement rate of over 2%.

As you can see First for Women also had an enforcement rate of over 2% but had less complaints, 3.8/1000. For the first time in a few years Absa was not the most complained about insurance company. They reached the top spot in both 2018 and 2017 Ombudsman reports for most complaints.

Short-term Insurance companies that received the LEAST COMPLAINTS in the 2019 Ombudsman Report:

Name of Insurer Number of Complaints received by OSTI per thousand Claims received by Insurer Share of matters resolved through enforcement of OSTI
Auto & General 1,66 1,88%
Hollard 1,58 1,31%
Discovery 1,56 1,68%
Santam Ltd 1,45 1,27%
OUTsurance 1,02 0,00%
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*Full Ombudsman Insurer Statistics shown at the end of this piece.

For the second year running OUTsurance has the least amount of complaints with 1.02/1000 complaints and an 0% enforcement rate. I had to triple check these numbers, but this is truly what the 2019 Ombudsman Report says.

Santam has been one of the top-rated insurance companies for a couple of years running, according to the number of complaints and customer satisfaction on the SA-csi Report. Santam also has a pretty low enforcement rate of 1.27%. If you want to get a quote directly from Santam fill in this quick form:

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The other short-term insurance companies with the least number of complaints were Discovery Insure, Hollard Insurance, and Auto & General Insurance. Let’s see what the 2019 Customer Satisfaction Index says.

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Consulta SA-csi 2019 Report for Short-term Insurance

We look at this report from Consulta every year to gauge what customers' experiences were like and if they were satisfied.

**This report is drawn up from an independent body that has no affiliation with any of the short-term insurance companies.

Consulta states that the biggest take away from 2019 was the following; as much as companies believe that service and the digital transformation are interchangeable- IT IS NOT. Technology will forever change and evolve but the fundamentals of service will remain the same such as being relevant and responsive to customer needs and wants. That’s not to say that customer experience can’t be bettered by digital transformation and artificial intelligence.

“Having all the best digital platforms, tools and apps does not translate into customer loyalty or satisfaction.  If not managed correctly, digital transformation can create customer frustration and dissonance when aspects such as complaints handling, resolution and claims processing are ‘process driven’ rather than demonstrating empathy and trust to your customers.”

Said Ineke Prinsloo, Head of Customer Insights at Consulta
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As seen by the report from Consulta above the top-rated short-term insurance companies as far as customer service are as follows:

  1. Virseker
  2. OUTsurance
  3. Old Mutual Insure

Santam was on par with the industry average for customer service. Those short-term insurance companies that have been rated amongst the top as far as customer service goes but came in just under industry average are Hollard, Auto & General, Momentum, MiWay and Discovery.

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Consulta also looked at whether consumers feel like they received value for money based on quality and price. Consumers perceived the most value for money with Virseker, Old Mutual Insure and Hollard. Other short-term insurance companies not trailing far behind and just below the industry average.

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A key take-out from the SA-sci 2019 report is that only a small number of providers reach customer expectations with the biggest gap being…reliability of the product offering. This basically means, did the insurance offering and cover do what you expected it to when you needed it? Do you feel like your insurance provider has met your expectations and pulled through when you needed them? If you are interested in looking at the premiums and reviews from other consumers follow this link.

Full Ombudsman’s Insurer Statistics:

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best insurance companies South Africa MoneyPanda

To view the full OSTI Report of 2019 click here.

References:

  1. https://www.osti.co.za/media/1378/osti_annual-report-2019_final-26may-rev2.pdf
  2. https://www.osti.co.za/
  3. https://blog.consulta.co.za/2020-short-term-insurers-lose-sight-of-customer-experience-as-race-to-digital-transformation-intensifies/
  4. https://www.riskafrica.com/vital-role-for-the-short-term-insurance-ombud-in-post-covid-world/
  5. https://www.moneyweb.co.za/news/companies-and-deals/long-term-insurance-complaints-on-the-rise/
  6. https://www.businesslive.co.za/bd/national/2020-05-27-ombud-for-short-term-insurance-set-to-feel-the-fallout-of-covid-19/
  7. https://businesstech.co.za/news/trending/402223/these-are-the-most-complained-about-insurance-products-in-south-africa-2/

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