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New research shows short-term insurers cashed in during COVID crisis whilst clients made to beg for payments

New research shows short-term insurers cashed in during COVID crisis whilst clients made to beg for payments

Johannesburg — It is clear from new research released this week, 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.

This is according to Ryan Woolley, CEO of Insurance Claims Africa (ICA), who is representing over 850 claimants in their ongoing fight to receive final payments from insurers.

The research, conducted by Dr Roelof Botha, Economic Advisor to the Optimum Investment Group, and Keith Lockwood from the Gordon Institute of Business Science, exposes 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.

Ryan Woolley, CEO of Insurance Claims Africa says: “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.

“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.”

According to Woolley, insurers continue to frustrate the process. “We are finding that insurers are adopting long, overly pedantic processes, and doing everything in their power, it seems, to delay payments. We are very concerned about some insurers attempting to limit the quantum that is due to policyholders yet they have been sitting on the funds for over 14 months earning interest.

“We have had positive interaction with Hollard South Africa and Old Mutual Insure. However, with Santam the process continues to be frustrating, Santam is working through its lawyers (Norton Rose Fulbright) to avoid liability for large claims in its Hospitality & Leisure Division. On our information H&L had serious administrative issues, to the extent that they cannot identify which policy wordings were issued for 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.

“We have proposed a sensible solution to their problem but this appears to be frustrated by their attorneys, and we have now taken the decision to correspond directly with the Santam Board and its major shareholders.

“Insurers need to stop greenwashing 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. After all, companies are judged not on what they say, but on what they do,” concludes Woolley.


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