Staff Reporter
RESEARCH conducted in South Africa indicates that the short-term insurance industry (STI) earned record profits during the pandemic, and has no reason to further delay settlement of all outstanding Covid-19 business interruption claims.
According to Ryan Woolley, the Chief Executive Officer of Insurance Claims Africa (ICA), who is representing over 850 claimants in their ongoing fight to receive final payments, insurers have adopted long, overly pedantic processes, and are doing everything in their power to delay payments.
The research, conducted by Dr Roelof Botha, Economic Advisor to the Optimum Investment Group, and Keith Lockwood from the Gordon Institute of Business Science, exposed the vast disparity between the substantial financial gains achieved over the past year by short term insurers, and their customers, who because of non-payment of claims, are desperate for any lifeline that will allow them to survive and retain thousands of jobs.
Many of these businesses have already closed, resulting in a negative impact on the economy, and adding to an already alarming unemployment rate.
“The gross inequity of the situation is blatantly prejudicial to claimants who are still awaiting settlement more than one year after the start of the pandemic. We believe that insurers are ignoring their clients extreme financial anguish and are underestimating the level of dissatisfaction and loss of trust from the delays in settlement,” Woolley said during a special webinar that was held to address the issue of non-payment of business interruption claims.
Woolley was of the opinion that it is not too late for insurers to redeem themselves by finalising these claims quickly, ethically and fairly.
“We are urging insurers to make interim payments to customers while they resolve the current bottlenecks within their systems that are preventing payments. For too long now we have watched claimants struggle to survive financially, and I can only hope that the board members and shareholders of these insurers are alive to the difference between their financial positions compared to that of their customers,” Woolley.
According to Woolley, insurers continue to frustrate the process.
He added that the study found that insurers are adopting long, overly pedantic processes, and doing everything in their power, it seems, to delay payments.
He said another concerning aspect is that some insurers attempting to limit the quantum that is due to policyholders while they have been sitting on the funds for over 14 months earning interest and being able to claim their payments from the companies they are re-insured with.
“We have had positive interaction with Hollard South Africa and Old Mutual Insure. However, with Santam the process continues to be frustrating,” he said.
He said that Santam is working through its lawyers to avoid liability for large claims in its Hospitality and Leisure Division.
He said that in some cases, insurers had serious administrative issues such as not being able to identify which policy wordings were issued to their clients.
“They are currently arguing that the brokers who moved their books of business from previous insurers, did so to achieve less cover and more expensive premiums,” he said.
Woolley said that the researchers did propose a sensible solution to their problem but this appears to be frustrated by attorneys.
“We have now taken the decision to correspond directly with the Santam Board and its major shareholders. Insurers need to stop green washing their response to this crisis. They are not the angels that they purport to be, and have done very little to demonstrate that they have their customers’ interests, and not their own profit margins, at the heart of their decisions,” he said.
Woolley was of the opinion that the insurance companies will be judged not on what they say, but on what they do.
