Insurer complaints tally revealed after first year of FIC

Insurer complaints tally revealed after first year of FIC | Insurance Business New Zealand

Insurer complaints tally revealed after first year of FIC

Insurers say they are meeting high standards of service and resolving almost all of their claims with their customers – and they say newly released figures audited for the first time back this up.

Insurance Council of New Zealand CEO Tim Grafton said only 14 complaints were upheld out of a total of 1,122,201 claims lodged between 1 January 2016 and 31 December 2016, and that for him this was a surprising revelation.

“I am delighted to see those figures because they are better than I thought. I thought they would be good but I didn’t really think they would be as exceptional as they have been so I’m more than pleasantly surprised,” he told Insurance Business.

He hoped that by ‘reporting the facts’ the data would help to change misconceptions in the community’ and give people the confidence that insurance could be relied upon.

“So if you’ve made a complaint, 95% were sorted out by the company with their customer,” he said.

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“I think this is a reflection of the high standards that the Fair Insurance Code sets in terms of its self-regulation of our members so they are meeting those standards in almost all cases.

“And I think it reflects on the elements of the code which is to set effective timeframes for dealing with claims as well as dealing with complaints and requirements to keep insured informed to give reasons why a timeframe may not be met and agree new timeframes with the insured.

“But clearly there are complaints that come through and I think it’s really pleasing to see if someone does complain to their insurer then 95% of those complaints don’t have to go any further so that’s good.”

From the 1,122,201 claims lodged, 3,858 (or 0.34% of claims) gave rise to a complaint by a customer.

Of that number, 204 (5.3% of claims to internal dispute resolution service) could not be settled internally and went on to the external dispute resolution schemes.

Out of those 204, there were 14 (6.9% of complaints to dispute resolution scheme) complaints upheld.

The audit is part of recently self-imposed rules under the Fair Insurance Code which tallies the number of claims made by SMEs (of 19 staff members or under) in the commercial area and domestic lines including house, contents, motor and travel insurance plus the number of complaints that were lodged.

Grafton stressed that if the complaints were upheld the external dispute resolution schemes’ decisions were binding on the insurer ‘so there’s an enforcement to mention to that as well’.

He said the data had been reported to the Code Compliance Committee on Tuesday, which had three independent members on it ‘of very high standing’.

These were Hon David Caygill who peer reviewed the FIC, and former ombudsmen Rt Hon Sir Anand Satyanand, and Dr David McGee CNZM QC.

The committee had met every quarter during 2016 to hear about any significant breaches and any unresolved significant breaches, of which there had been none in the whole year.

When asked about Youi, and the $100,000 penalty imposed on them by ICNZ in October, Grafton said that while this member ‘had a lot of media attention drawn to them in 2016’, that had related to complaints that had arisen prior to 1 January 2016.

In their feedback, the Code Compliance Committee had made the point, Grafton said, that one aspect of the reporting may need to be tweaked.

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“When you look at the 204 that were referred to external dispute resolution schemes and the 14 that were upheld, that means that 190 were either settled, withdrawn or partially upheld and we probably need to report on the partially upheld because partially upheld is upheld to some degree, so that’s something we might look at in the future.

“It’s still a very small proportion of the total number of claims,” he added.

Another concern was what effect the Kaikoura earthquake would have on the complaints figures for 2017.

“I’d be naïve to think that when you’ve got a very high number of claims of the nature that have come out of Kaikoura that there won’t be some issues that will arise,” Grafton said.

“But the really good point about this is that insurers acting on behalf of EQC as their agents are still required to comply with the Fair Insurance Code which sets very high standards and time frames, so the experience for the homeowner will be matched by those high standards.”

He added that these standards were ‘far in excess of any statutory requirements’.

“They set a very high benchmark and when you set a high benchmark it’s a tough gig to produce exceptional results but that’s what we aspire to.

“If we have more complaints in a high pressure context and that comes through, well, so be it, but we’ll have tried our very best to do our very best for our homeowners.”

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