CRA Insurance News – South Africa
By NTANDO THUKWANA
The impact of the coronavirus will be felt across the short-term insurance industry and by consumers this year, the Ombudsman for Short-Term Insurance (OSTI) said on Wednesday in its 2019 annual report.
The OSTI, which facilitates consumer disputes between short-term insurance companies and consumers, said it expects a surge in Covid-19 complaints related to business disruption and travel in 2020.
CEO of the OSTI Edite Teixeira-Mckinon said that while the report does not cover the current contagion, the global impact of the coronavirus will be felt by the organisation, the industry as a whole, as well as consumers with some of the trends in its 2019 report already being disrupted.
“Up until the end of March 2020 we had received, year on year, substantially more complaints, so that trend is continuing,” said Teixeira-Mckinon.
“But 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. With less vehicles on the road, there are less claims and therefore less complaints. So there was an evident decline in April and May 2020.”
The OSTI closed 9,167 complaints out of 10,367 in 2019, which translated to more than R94.9m recovered in favour of consumers compared to the prior two year’s R87m.
Complaints for motor vehicle insurance made up 49% of the total number of received complaints, followed by homeowner’s insurance (20%). For commercial insurance, complaints decreased to 7.9%, while household content insurance grievances grew to 6%.
Teixeira-Mckinon said keeping the communication open and resolving disputes timeously and effectively have become of paramount importance, citing that there are already concerns regarding potential cancellations of insurance cover as a result of the coronavirus and its consequent lockdown.
Credit to Business Live.