Scheme sees sharp spike in complaints

by Maryvonne Gray 08 Apr 2016

Scheme sees sharp spike in complaints

Canterbury earthquake related issues are behind a steep rise in the number of complaints to the Insurance & Financial Services Ombudsman (IFSO) compared to the same period last year.

From December 2015 to March 2016, the IFSO received 985 complaint enquiries and accepted 100 complaints for investigation, compared to 895 complaint enquiries and 60 accepted complaints the year before.

The latest figures were also an increase on the previous four months, with a 10% rise from 90 in August to November to 100.

Of the 100 complaints, 17 of them related to Canterbury earthquakes – this compared to only 5% (3) of the 60 this time last year being earthquake related.

IFSO Karen Stevens said: “Common Canterbury issues we are seeing include cash settlement issues; delays; driveways, fences and retaining walls; repair or rebuild costs; and issues with the scope of works.”

Stevens said that together with being the most destructive catastrophe in New Zealand history, the earthquakes had had an unprecedented impact on the insurance industry and its customers.

“Our scheme has dealt with 1,700 Canterbury earthquake complaint enquiries and 175 complaints since 2010.
“We believe there are still more consumers who could need assistance to resolve their complaints.”

Stevens continued: “Effective dispute resolution is about bringing two parties together, listening to both sides and considering the facts as an independent third party.

“We are doing our best to help resolve Canterbury complaints in this way, and we continue to adapt our approach to deal with the increased level of complexity of the complaints.”

Stevens said one insurer, Southern Response, had agreed to extend the IFSO Scheme’s jurisdiction for their customers so the IFSO could get involved where the amount in dispute exceeded $200,000.

“This has given us more flexibility to investigate complaints where more money is at stake,” she said.

“We want to get involved as early as possible to be able to facilitate a greater number of agreed outcomes.”

One positive was that the rate of Canterbury complaints settled was 35%, compared with a 22% settlement rate for complaints overall.

Stevens clarified: “Settlement means the customer and their insurer have agreed to the outcome.

“It demonstrates a willingness from both parties to work through complex issues to finalise the claim.”

Stevens added that even though there were more complaints, this didn’t need to be seen as a bad thing.

“We’re pleased to hear from more consumers who have issues and questions about insurance or financial services. Our service is free and independent and we are here to help.”

As well as Canterbury earthquakes, another development IFSO had detected was a slight rise in complaints relating to credit contracts from the same 4 month period last year (from 1 to 4 complaints) and a rise in complaints about financial advisers (from 0 to 4 complaints.)

The Insurance Council of New Zealand was unavailable to comment on the figures at the time of publication.