IFSO Scheme highlights alarming rise in insurance complaints
IFSO Scheme highlights alarming rise in insurance complaints | Insurance Business New Zealand
Catastrophe & Flood
IFSO Scheme highlights alarming rise in insurance complaints
This year has the highest number of enquiries received by the scheme
Catastrophe & Flood
By
Kenneth Araullo
The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) reported a near doubling of complaint enquiries over the past year.
According to the recently released annual report, the IFSO Scheme saw a surge to 4,120 complaint enquiries in the past year, marking a 45% increase from the 2,847 recorded in 2022. This represents the highest number of complaint enquiries the IFSO Scheme has received in a single year.
Karen Stevens, Insurance & Financial Services Ombudsman, attributed this surge to extraordinary weather events experienced during the year.
“All the indications at the start of the year were that we would have fewer complaints than in the last few years. However, that all changed when the flooding swamped Auckland and the far North in January, and Cyclone Gabrielle struck the North Island in February. Almost overnight, complaint enquiries increased by 45% and complaints by 15%,” Stevens said.
In the past year, 59% of the complaints were concerning general insurance, covering house, vehicle, travel, and contents insurance. Health, life, and disability insurance constituted 27% of the complaints, loans or credit contracts made up 8%, and 3% were related to financial advisers.
Delays and customer service issues were the primary concerns for complainants. Consumers frequently reached out due to delays and customer services issues, Stevens explained, and not only regarding the recent weather events, but also for “business as usual” claims.
“Insurers need to clearly communicate”
Stevens emphasised that insurance and financial services touch various aspects of life, from the mundane to critical life events. She highlighted that both consumers and the industry can learn valuable lessons from the reported complaints.
“Insurers need to clearly communicate to their customers if there are any onerous or unusual terms in their policies. They should also be using modern practices such as emailing and phoning customers rather than relying purely on mail for important communications such as policy cancellations,” Stevens said.
Lenders were also urged to conduct reasonable inquiries to ensure affordability before granting loans, emphasising the improvements following updates to the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
Finally, consumers were reminded to carefully read and check the agreements they sign, particularly regarding insurance policies, to understand coverage and exclusions.
“When it comes to insurance, consumers really need to understand what their policy covers and any exclusions, and not just make assumptions. People should be checking the details in their renewal documents every year too,” Stevens said. “When it comes to loan or financial service agreements, it’s a good idea to check if there are any fees and charges outlined in the contract, and ask if you’re not sure.”
What are your thoughts on this story? Please feel free to share your comments below.
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
