Make sure customers understand product: ISO

Something as simple as a customer not completely understanding the insurance product they purchase can lead to a complaint, the Insurance and Savings Ombudsman says.

Tuesday, September 23rd 2014, 6:00AM

by Susan Edmunds

The ISO has released its latest annual report, which shows the scheme resolved its highest number of complaints since 1998 – a total of 300 complaint investigations and 3215 inquiries.

Sixty-two per cent of complaints related to general insurance.

Only a small number related to financial advisers, she said.

But the second-largest number of complaints related to health, life and disability insurance, at 31%.

For health insurance, the most commonly disputed issues included pre-existing conditions and non-disclosure of material information.

Life insurance complaints related to policy definitions of terminal illnesses or the ability to return to work.

Issues around income protection related to the medical evidence of inability to work and proof of earnings.

Ombudsman Karen Stevens said: “it can be simply that they don’t have the cover they thought they had. With trauma cover, many people think they will be covered in all circumsatances for all things that relate to a trauma. Sometimes it’s a matter of the customer not having fully disclosed all the material information… It can be as simple as a customer misunderstanding what they are buying.”

She said advisers needed to make sure they were selling products to customers who fully understood what they were getting and were getting the cover they needed.

Advisers also needed to approach the complaints process as a positive thing, she said.

“Complaints provide free feedback. That is the message we are trying to get across. If a complaint is well handled, you end up with a more satisfied customer.”

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